Doe turbo tax apply the 33.3 percent allocation (for three sisters) in the sale of an inherited home?

Assuming it was not used for personal use by any one of you after the inheritance, and was not used to produce income (such as renting it out) for any of you, you'll report the sale in the investments section (Stocks, Bonds, Mutual Funds, Other) and all values you enter will be 33% of the total value.

To add a few details to the information from SuperUser Carl, take a look at the following:

TurboTax will not apply the 33% allocation to the sale of the inherited home.  You will need to do that by only entering your portion (33%) of the cost basis and the sale price.  That way your return is only reporting your portion of the sale.  Each individual will need to do this on their own return.

This type of sale is entered as a sale of an asset that will be reported on Schedule D for capital gains.  Using TurboTax, take the following steps to get to that section of your program:

• Using the search box in the upper right corner, type “inherited home – home sale”.  Then click Find.
• The search results will show a link to Jump to inherited home – home sale.  Click that link.
• This will bring you to the correct section in the program.  Answer the question about selling an investment with Yes.
• Answer the question about receiving a 1099-B with No.
• Assuming that you did not use the property as a second home, choose Everything Else as the type of investment sold (not Second Home).
• Proceed with the interview and answer the questions reporting only your net proceeds (33%) of the sale.  Be sure to also adjust the fair market value of the property to only consider your portion (33%) of the value since you only owned a portion of the property.