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1099-MISC for garage/estate sale proceeds; How to address on 1040
Posted on 2/3/23 at 5:52 pm
Posted on 2/3/23 at 5:52 pm
Pops died, adult child inherited everything. Held an estate sale and sold all contents of the house. The estate sale company issued child a 1099-MISC for $6,000 proceeds.
Everything I read says there is no tax owed on occasional garage sale proceeds because there is no gain. You inherit a couch worth $50 and sell it for $50. If you take the estate out of it, you pay $1,000 for a couch and sell it years later for $50. Either way, no gain, no tax.
The question: What, if anything, does child do with the 1099 amount on their 1040 tax return? Just ignore the 1099 if satisfied there is no gain? Or is there a particular line or schedule where it should be listed and addressed? Thanks for any help.
Everything I read says there is no tax owed on occasional garage sale proceeds because there is no gain. You inherit a couch worth $50 and sell it for $50. If you take the estate out of it, you pay $1,000 for a couch and sell it years later for $50. Either way, no gain, no tax.
The question: What, if anything, does child do with the 1099 amount on their 1040 tax return? Just ignore the 1099 if satisfied there is no gain? Or is there a particular line or schedule where it should be listed and addressed? Thanks for any help.
7
Posted on 2/3/23 at 6:49 pm to Twenty 49
quote:
Just ignore the 1099 if satisfied there is no gain?
Probably a bad idea.
I don’t know the specific form, but I’d imagine you’ll have to report the cost basis as $6000 somewhere else to nullify the taxes.
Posted on 2/3/23 at 9:43 pm to Twenty 49
You get a step up in basis in inherited property. Was there any appraisal on the property?
Posted on 2/5/23 at 7:59 pm to Twenty 49
Since a 1099 was issued it needs to be reported or the irs will probably send a notice.
Child gets the property at fair market value so unless there was an appraisal, I’d show cost basis equal to the proceeds for no gain/loss.
Child gets the property at fair market value so unless there was an appraisal, I’d show cost basis equal to the proceeds for no gain/loss.
Posted on 2/5/23 at 9:07 pm to Twenty 49
What box on 1099-MISC has the amount in it?
You absolutely should not ignore it and there should be no tax due as long as what was sold was more than the value at date of death.
You absolutely should not ignore it and there should be no tax due as long as what was sold was more than the value at date of death.
Posted on 2/5/23 at 9:10 pm to Twenty 49
1099 for $6000 Cost basis $6000 Gain $0
Definitely report the 1099 though
Definitely report the 1099 though
Posted on 2/6/23 at 6:25 am to bobdylan
quote:
I’d show cost basis equal to the proceeds for no gain/loss.
Where would you do so? What lines of the 1040? Is there a certain schedule that needs to be completed?
Posted on 2/6/23 at 9:03 am to Twenty 49
quote:
Where would you do so? What lines of the 1040? Is there a certain schedule that needs to be completed?
On sch d, long term capital gain/loss…provided the deceased had the items that were sold at least one year.
Posted on 2/6/23 at 9:05 am to Twenty 49
I’m trying to think about this but I’m not an accountant, are 1099’s normally issued for this to individuals? I thought 1099s are for work? I understand the Estate sale company wants to 1099 their expenses to cover themselves, but this is basically a consignment company? Does eBay issue 1099’s?
Posted on 2/6/23 at 10:07 am to baldona
1099s are to report various of income outside of wages, salaries, and tips. There are multiple (20+?) types of 1099s
1099-INT reports interest income; 1099-DIV is dividends and distributions, etc.
1099-INT reports interest income; 1099-DIV is dividends and distributions, etc.
Posted on 2/6/23 at 10:37 am to baldona
quote:
I’m trying to think about this but I’m not an accountant, are 1099’s normally issued for this to individuals? I thought 1099s are for work? I understand the Estate sale company wants to 1099 their expenses to cover themselves, but this is basically a consignment company? Does eBay issue 1099’s?
I asked OP what box was used because I'm guessing this is listed as other income. The pennalties for not sending a 1099 when one is required have gotten fairly steep, so as a matter of course, many companies are just issuing 1099s to everyone to CYA.
Posted on 2/7/23 at 4:14 pm to Twenty 49
I guess it depends on what you are using but it will prob ask, Do you have 1099-misc, int, R, etc.. to enter? You would click yes and enter it.
For example, the irs sent me a 1099-int because i guess they paid me a little interest for taking so long on sending me a refund. Well of course i had to claim that as income so i just clicked on enter 1099 and entered the amount.
For example, the irs sent me a 1099-int because i guess they paid me a little interest for taking so long on sending me a refund. Well of course i had to claim that as income so i just clicked on enter 1099 and entered the amount.
This post was edited on 2/7/23 at 4:16 pm
Posted on 2/7/23 at 4:28 pm to dgnx6
I guess somewhat similar.
FIL passed away last year. Left kids an old house/property.
Sold the house and they received a 1099-S.
Dug around and see that it had to be filed as business property (on tax software) and stipulated as inherited on date aquired.
Property was appraised for X which was a little more than what it was sold for. So actually had a slight loss on the sale, since there is now a step-up basis on inherited property.
FIL passed away last year. Left kids an old house/property.
Sold the house and they received a 1099-S.
Dug around and see that it had to be filed as business property (on tax software) and stipulated as inherited on date aquired.
Property was appraised for X which was a little more than what it was sold for. So actually had a slight loss on the sale, since there is now a step-up basis on inherited property.
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