1099 from the sale of inherated property

My understanding was that as part of an estate of low value the sale proceeds would not be subject to tax.

Again my understanding of the entire process is skimpy and I apologize for any misuse of terms.

Long story short the title company recently 'found' that the 1099 had not been mailed. When they did issues the belated 1099 they reported the sale as personal income without notation as being part of an estate.

Since there is a 1099 issued I think I need to file an amended retune.

Two questions first do we need to file an amended return and if so how do we input the information on the sale as it was part of an estate (not taxed)? ===================== If this were sold as part of the undistributed estate, the sale would go on the form 1041, not your 1040. The basis is what was listed (or would have been listed, if under the threshold) on form 706.

You are confused about what's taxable and what's not. The Fair Market Value of the house at your parent's death is a nontaxable inheritance. Your "basis" in the house is that amount. If the sale was soon after the death it's reasonable to use the sale price as the FMV. There is likely no taxable income in such a case, but you will need to amend your 2012 return. If you had held the property for several years and sold it for a gain the gain would be taxable income.

Yes, you need to amend your 2012 return. Otherwise the IRS's computers will think the sale price is all taxable income to you. You need a Form 8949, Schedule D, and 1040X. On the 8949 this is a Part II type C transaction. For date acquired you show "inherited."

You might want to engage a tax professional to assist you with this.

Phil Marti VITA/TCE Volunteer Clarksburg, MD