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how to correctly enter 1/3 of inherited /sold parents home

Forum|Forum|2 years ago
March 5, 2024
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We (3 beneficiaries) inherited parents home. Home needed lots of work and was sold 'as is' condition. The home was empty for 3 months and sold, as is. The Realtor sold home for $162,000 (divided by 3, $54,000), I used the $162,000 as value at time of death and the sales price. The net proceeds (less closing fees) was $152,269.34 divided by 3 ($50,756.44). Are the $54,000 - $50,756 the numbers I enter into the other investment section to record the inherited home? Would this generate a capital loss? I thought it would be a wash but now I'm not sure. I understand I describe as 1/3 inherited property. I'm not sure if I list 'second home" or 'other' ? Technically none of us were living in the home or using it for personal use - I guess this is where I'm getting confused.

Best answer by DianeW777

You can correctly enter the sale by using the information here. Based on your information it would make sense that you would show a capital loss on your return and you will use the description as Inherited Property (see below).

If three of you inherited the home then the cost basis is the fair market value (FMV) on the date of death. This means that you would split it three ways and it sounds like the selling price would be a good FMV to use as your cost basis because it was sold within three months.

The cost would be entered and the selling price (divided by 3) then one third of the selling expenses. This information assumes none of the three beneficiaries lived in this house as their home since it was empty and based on your statements.

This is considered investment property, report the sale using the steps below:

Under Wages & Income scroll to Investments & Savings
Select Start/Revisit beside Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B)
Select Add Investments or continue to go through the screens to select 'Other' > Continue
Begin to enter the sale description > Under Type select Other > Under How did you receive select 'I Inherited it' (if applicable)
For TurboTax Desktop you would enter the description 'Inherited Property' and select 'Long Term' as the hold period
Enter your sale date and 'Various' as the Acquired date
Continue to complete the screens until you arrive back at the Wages & Income main page.

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

D

DianeW777Answer

You can correctly enter the sale by using the information here. Based on your information it would make sense that you would show a capital loss on your return and you will use the description as Inherited Property (see below).

If three of you inherited the home then the cost basis is the fair market value (FMV) on the date of death. This means that you would split it three ways and it sounds like the selling price would be a good FMV to use as your cost basis because it was sold within three months.

The cost would be entered and the selling price (divided by 3) then one third of the selling expenses. This information assumes none of the three beneficiaries lived in this house as their home since it was empty and based on your statements.

This is considered investment property, report the sale using the steps below:

Under Wages & Income scroll to Investments & Savings
Select Start/Revisit beside Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B)
Select Add Investments or continue to go through the screens to select 'Other' > Continue
Begin to enter the sale description > Under Type select Other > Under How did you receive select 'I Inherited it' (if applicable)
For TurboTax Desktop you would enter the description 'Inherited Property' and select 'Long Term' as the hold period
Enter your sale date and 'Various' as the Acquired date
Continue to complete the screens until you arrive back at the Wages & Income main page.