I inherited a house from my mother passing and sold it below market value. Do I have to claim it?

Forum|Forum|4 years ago
February 8, 2022
2 replies
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The house sale was sold for $35,000

TurboTax Deluxe Online

Bsch4477

Level 15

If you did not receive form 1099-S and had no capital gain you do not have to report the sale Your cost basis is the value at your mother’s death.

LeonardS

Level 14

Yes, you will have to report the sale. To report the sale in TurboTax follow these steps:

Open or continue your return
In the search box, search for sold second home and select the Jump to link
Answer Yes on the Did you sell any stocks, mutual funds, bonds, or other investments in 2021? screen
- If you land on the Your investment sales summary screen, select Add More Sales
On the OK, let's start with one investment type screen, select Other, then Continue
On the Tell us more about this sale screen, enter the name of the person or institution that brokered the sale
On the next screen, select Second Home (choose this also for inherited homes) or Land and answer the questions to finish entering your sale

This link Where do I enter the sale of a second home, an inherited home, or land on my 2021 taxes? has information you may find useful.

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Bsch4477

Level 15

@LeonardS See my reply below and this discussion.

https://www.google.com/amp/s/turbotax.intuit.com/tax-tips/home-ownership/tax-aspects-of-home-ownership-selling-a-home/amp/L6tbMe3Dy

Mike9241

Level 15

@Bsch4477

Regarding capital gains on inherited property (and losses), you can claim a capital loss on inherited property if you sold it and all of these are true:

You sold the house in an arm’s length transaction.
You sold the house to an unrelated person.
You and your siblings didn’t use the property for personal purposes.
You and your siblings didn’t intend to convert the property to personal use before the sale.

Mike9241