Valid sales cost adjustment for inherited investment property

Forum|Forum|1 year ago
February 19, 2025
1 reply
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I sold an inherited property last year and received a 1099-S that shows the complete sale price, with no adjustments for sales costs. My sales costs included realtor commission, escrow fee, and title insurance. Can I adjust my capital gain by the sum of these sales costs? The property sat empty for the previous 3 years.

Best answer by MindyB

Yes. An inherited house is considered investment property and you can deduct the selling expenses on the inherited property. It is only considered an investment if there was no personal use, which you confirmed, but also, the sale needs to have been made to an unrelated party in an arm's length transaction.

Here's how to report this in TurboTax Online:

Navigate to Wages & Income > Investments and Savings (1099-B, 1099-INT, 1099-DIV, 1099-K, Crypto) > Add/Edit
Add Investment
Choose Enter a different way
Choose Investment type of Other
Add a description
You will be asked what type of investment, choose "other". ‌Also, indicate this was inherited.
Proceed to enter the rest of the information.
On the next screen, you will be asked if you paid sales expesnes that aren't included in the proceeds reported on the form. Check the box and enter the total.

MindyBAnswer

Here's how to report this in TurboTax Online:

Navigate to Wages & Income > Investments and Savings (1099-B, 1099-INT, 1099-DIV, 1099-K, Crypto) > Add/Edit
Add Investment
Choose Enter a different way
Choose Investment type of Other
Add a description
You will be asked what type of investment, choose "other". ‌Also, indicate this was inherited.
Proceed to enter the rest of the information.
On the next screen, you will be asked if you paid sales expesnes that aren't included in the proceeds reported on the form. Check the box and enter the total.