Question

Capital gains on sale of inherited property

Forum|Forum|2 years ago
November 13, 2023
1 reply
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How do I show my portion of capital gains on sale of inherited house with three other heirs? Basis of house also in question since house was held for 38 years.

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Hal_Al

Employee

Q. How do I show my portion of capital gains on sale of inherited house with three other heirs?

A. Manually. You calculate your share of the sale amount and cost basis to report your share of the capital gain (or loss). If you are the one who received the 1099-S, for the full amount, then you report the full sale amount and show an adjustment for the amounts of gain attributable to the other heirs. The TurboTax interview handles this.

Q. Basis of house also in question since house was held for 38 years?

A. The cost basis is the fair market value (FMV) on the decedent's date of dearth (DOD). It doesn't matter what he paid for it 38 years ago. The cost basis "steps up" to the FMV on the DOD.

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PooledonAuthor

The property was held for 38 years AFTER being inherited by four heirs. It was recently sold. How to show capital gains on IRS return by each heir? What form?

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NCPERSON1

@Pooledon let's understand more. 38 years ago, the 4 of you inherited a home from an estate, right? just want to be sure the use of the word 'inherit' is the right context. if a living person gave the 4 of you this home, it would be 'gifted' to you.

how was the house maintained over 38 years, meaning was it rented out? or was it a beach / mountain / vacation home used amoung the 4 of you? That information would help responding to you.