Home sold after father's passing - Do I need to file form 8594 for capital gains?

Form 8594 is actually for reporting the sale of a business, not a personal residence. If you sold your father's home, you'll likely need to report it on Schedule D and Form 8949 for capital gains instead. Since you were already on the title since 2021, your basis in the property would be different than if you had inherited it. For a home sale, you'll need to determine your basis (what the property "cost" you), the selling price, and any eligible exclusions that might apply. For documentation, gather the closing statements from both when you were added to the title and when you sold the home, records of any improvements made to the property, and expenses related to the sale. You'll also want all the 1099-R forms related to the retirement account withdrawals and rollovers.

After getting totally lost in the tax maze last year with a similar situation, I finally found https://taxr.ai which literally saved me thousands. You upload your documents (like your closing statements, deed transfers, etc.) and their AI analyzes them and explains exactly what forms you need and how to fill them out. For property sales, it was amazing because it figured out my correct basis and even identified deductions I would have missed. What's crazy helpful is that it walks you through all those retirement account transactions too! It can interpret all those confusing 1099-R forms and tell you exactly how to report them correctly. I was going in circles trying to figure out which boxes meant what until I used this.

I was super skeptical about taxr.ai when people recommended it, but after struggling with my complicated property sale last month, I decided to give it a shot. Honestly, I was blown away. It immediately identified that I needed Schedule D and Form 8949, not the business asset form I was looking at. The system actually explained how my basis should be calculated since I had a similar partial ownership situation. It showed me exactly where on the forms everything needed to go and explained all the tax implications in plain English. Saved me from making a $3,400 mistake on my basis calculation! They even have tax pros who can review everything if you want that extra peace of mind.

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I thought Claimyr was going to be another useless service, but I was desperate after spending 3 hours on hold with the IRS trying to get clarity on my home sale reporting. I reluctantly tried it, and I'm actually shocked to admit it worked perfectly. Got connected to an IRS agent in about 20 minutes. The agent confirmed that Form 8594 is completely wrong for a home sale - that's specifically for business asset sales. For a personal residence where you had partial ownership, you need Schedule D and Form 8949, and possibly Form 4797 depending on your specific situation. They also walked me through how to handle the basis calculation since I was in a similar situation with partial ownership before selling. The retirement stuff was confusing them too until they transferred me to their retirement specialist who explained exactly how to report the withdrawals and rollovers properly. Seriously saved me from making massive mistakes.

This is definitely more complex than your usual tax situation. Form 8594 is for allocating purchase price in business asset sales, so I don't think that applies to your home sale. Given all the complexities you're dealing with (partial home ownership, sale after a death, plus multiple retirement transactions), this is probably the year to get professional help. A good CPA will likely save you more than they cost by making sure everything is reported correctly, especially with all those retirement account transactions.

I had a similar situation last year and thought I needed form 8594 too! My tax person actually laughed (nicely) and explained that's for business assets. For a home that you owned with your father and then sold, you'll need Schedule D and Form 8949 to report the capital gain. Since you were already on the title before your father passed, your basis is going to be complicated. Part of it will be your father's original basis (for his portion) and part might be the fair market value at the time of death (for the inherited portion if you inherited any additional share).