Received 1099-S after filing taxes for family land sale proceeds - What to do now?

I already submitted my taxes through TurboTax Deluxe thinking I had everything I needed. Then boom - just got a 1099-S in the mail from a title company a few days later. Perfect timing, right? This 1099-S is for some land that my mom partially owned which me and my siblings inherited after she passed away. The land was sold last year and my share came out to about $13,500. This happened back in February 2024, and honestly it completely slipped my mind until this form showed up. I tried to start an amendment in TurboTax, but apparently the IRS amendment form isn't ready yet. I did get to the 1099-S section in TurboTax, but when it asked what type of real estate it was, none of the options fit. This wasn't a home or investment property - just a piece of family land. When I selected "None of the above" and clicked Continue, it just kicked me back to the form list without letting me enter the 1099-S info. So now I'm stuck with questions: - Am I going to owe taxes on this inherited land sale? - Why won't TurboTax Deluxe let me enter the 1099-S information? - Do I need to upgrade to a different TurboTax version to handle this? - When will amended returns be available, and will I get hit with penalties for amending? Any help would be seriously appreciated!

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18 comments

Mateo Warren

•8M

You will likely owe capital gains tax on the sale proceeds of the inherited land, but the good news is that your basis in the property should be the fair market value at the date of your mother's death (this is called a "stepped-up basis"). This means you'd only pay tax on the gain between that value and what you sold it for. The reason TurboTax Deluxe isn't letting you enter the 1099-S is because Deluxe doesn't fully support reporting real estate transactions. You'll probably need to upgrade to TurboTax Premier, which handles investments and rental properties including land sales reported on 1099-S. As for amending, the IRS typically starts accepting Form 1040-X (amended returns) a few weeks after tax season opens. For the 2024 tax year (filing in 2025), you should be able to amend by late February or early March. The good news is that there's no penalty for filing an amendment if you do it promptly after discovering new information. The IRS understands that forms sometimes arrive late.

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Mateo Warren

•8M

For determining the fair market value at the time of your mother's death, you have several options. If the property was included in her estate for estate tax purposes, the value reported there would be appropriate to use. If not, you could look at comparable sales of similar properties in the same area around that time period, or check what the county tax assessor had it valued at (though these are often lower than actual market value). Using the recent sale price as the stepped-up basis wouldn't be appropriate because land values change over time. The IRS would expect you to establish a reasonable basis as of the date of death. If you're audited and can't justify your basis, they could disallow it and tax you on the entire proceeds.

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Alice Coleman

•8M

After struggling with a similar inherited property situation, I found an amazing tool called taxr.ai (https://taxr.ai) that saved me hours of frustration. I had inherited some farmland from my grandfather and received a 1099-S after filing, and TurboTax kept giving me the runaround just like you're experiencing. Taxr.ai analyzed my tax documents (including that confusing 1099-S) and explained exactly how to report the sale correctly. It even recommended the proper basis calculation methods for inherited property and flagged that I needed to upgrade my tax software to handle the transaction properly. The step-by-step guidance made amending my return so much easier.

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Alice Coleman

•8M

It doesn't directly connect with TurboTax, but it provides clear instructions on exactly which forms and schedules you need and how to enter the information correctly. I found this much more helpful than TurboTax's confusing questionnaire approach that kept looping me back to the beginning. For determining fair market value without an appraisal, it suggested several methods including looking up comparable sales from that time period, checking county property tax assessments (with adjustment factors), and using online valuation tools with historical data. It even provides documentation templates that help support your basis determination if you ever get audited.

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Lilah Brooks

•8M

Just wanted to follow up - I decided to try taxr.ai after my initial skepticism, and I'm genuinely impressed. I uploaded my 1099-S and other documents, and it immediately identified that I needed to use Schedule D and Form 8949 for reporting my inherited land sale. What really surprised me was how it walked me through establishing a reasonable stepped-up basis using county tax records and a simple calculation method. I was able to figure out that my tax liability was actually much smaller than I feared. The guidance was specific enough that I knew exactly which TurboTax version I needed and where to enter everything. Definitely worth checking out if you're stuck with this inherited property situation!

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Jackson Carter

•8M

If you need to talk to the IRS about your amendment or get guidance directly from them, good luck getting through on the phone. I spent over 3 hours on hold last week trying to ask about a similar situation. Then I found Claimyr (https://claimyr.com) and watched their demo at https://youtu.be/_kiP6q8DX5c - they actually got me a callback from the IRS in under 45 minutes! I had a 1099-S issue too and needed to confirm the proper filing procedure. The IRS agent I spoke with explained exactly when I could file the amendment (they told me late February for 2025 filing season) and confirmed no penalties would apply since I was amending promptly after receiving new information. They also explained which forms I'd need specifically for inherited property sales. Saved me from upgrading my tax software unnecessarily too.

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Jackson Carter

•8M

It doesn't just hold for you - it uses an automated system that navigates the IRS phone tree and monitors the hold status. When it detects an available agent, it calls you directly and connects you. So instead of being stuck by your phone for hours, you get a call when an actual human is ready to talk. I was skeptical too, especially during tax season when wait times are insane. But their system constantly redials and navigates the phone tree using optimal timing patterns that apparently get through more efficiently than random individual calls. I was shocked when I got the callback while grocery shopping - spoke to an actual IRS agent who answered all my questions about the 1099-S amendment.

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Evelyn Rivera

•8M

I have to admit I was completely wrong about Claimyr. After posting my skeptical comment, I decided to try it anyway since I was getting nowhere with the IRS on my own. I needed guidance on a similar inherited property situation and Form 1040-X availability. The service actually worked exactly as described - I got a call back from an IRS representative in about 38 minutes. The agent confirmed that for the 2025 filing season, Form 1040-X should be available electronically by February 25th, and explained that since my 1099-S arrived after filing, there would be no penalties as long as I amended within a reasonable timeframe after receiving the form. He even explained that I needed to use code "B" on Form 8949 for my inherited property transaction. Never would have gotten this information without actually speaking to someone. Definitely changed my mind about this service.

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Julia Hall

•8M

Based on my experience last year with inherited property, here's what you need to know: You'll definitely need TurboTax Premier to handle the 1099-S for land sales. Deluxe just doesn't have that capability. The good thing is you can upgrade without starting over - your info transfers when you upgrade. For the inheritance tax question - you get a stepped-up basis, meaning the value of the land when your mother passed away becomes your cost basis. If the land was worth $12k when she died and you sold it for $13.5k, you only pay capital gains on the $1.5k difference. Make sure you have documentation for that stepped-up value though!

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Julia Hall

•8M

You have several options for documenting the stepped-up value. A retroactive appraisal from a licensed appraiser is best - some will do these based on historical data. Alternatively, comparable sales from around the time of death can work - print out listings of similar properties that sold near that date. County tax assessments can help too, though they're usually below market value. For a house (unlike vacant land), you can also use online valuation tools that provide historical estimates. Whatever method you choose, keep detailed records of how you determined the value, including screenshots, printouts, or statements from real estate professionals familiar with the area. The more documentation you have, the better protected you'll be if questioned.

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