A parent gifted a home to his three children ten years ago with understanding he would live there till death. The parent passed away in 2019, house was sold in 2020. The house is in NY State. The client lives in CT. What IRS form is the sale reported on? Is it correct that any Capital Gain is reported to NY only? My client is only responsible for 1/3 of any gain. Do I report all entries as 1/3 the amounts? basis--sale price--etc.
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with understanding he would live there till death.
That sounds like it very well could be a "Life Estate". *IF* that is the case, the property gets a step-up in Basis and there may not be a gain (there could even be a loss).