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March 9, 2024
Question

shared inherited house

  • March 9, 2024
  • 1 reply
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My father inherited 1/4 of a house when his father died,( 1994)  when my father died( 2007) that share was dived among my siblings and my aunt continued to live there. The house sold in 2023 and I received 1/16 of the sale. I have a 1099-s for that share. how do I report this? What date do I use to report market value.

Thank you

    1 reply

    March 13, 2024

    This will be reported as an investment sale of inherited property, assuming you never lived there.

    1. Your cost basis will be 1/16th of the fair market value (FMV) on the date of death of your father. You do not use this date on the tax return.
    2. The 1099-S, itself, will not be an entry form in TurboTax, see the instructions below to enter your sale.
    3. Under Wages & Income scroll to Investments & Savings
    4. Select Start/Revisit beside Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B)
    5. Select Add Investments or continue to go through the screens to select 'Other' > Continue
    6. Begin to enter the sale description >  Under Type select Other > Under How did you receive select 'I Inherited it' (if applicable)
    7. For TurboTax Desktop you would enter the description 'Inherited Property' and select 'Long Term' as the hold period
    8. Enter your sale date and 'Various' as the Acquired date
    9. Continue to complete the screens until you arrive back at the Wages & Income main page. See the image  below.

    Inherited property is always considered to have a long term holding period which provides favored tax treatment.

                        

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