Great question!!
I am going to assume that you did not rent the property from 2016-present.
If you inherited the property, the cost will be the Fair Market Value (FMV) on the date that the last living parent died. You might not know this but could try to find what that was by looking at the assessed value on the property tax bill for 2016. You could also reach out to a professional to see what that house would have been worth on that day.
To enter the sale of your main home in TurboTax:
- Open (continue) your return in TurboTax Online. (If your return isn't open, you'll need to sign in, click Take me to my return, then click Pick up where I left off.)
- Click My Account (top right of your screen).
- Select Tools.
- In the pop-up window, select Topic Search.
- In the search bar, type sale of home.
- In the results box, highlight sale of home, then click GO.
- You'll land on the Sale of Your Main Home page. Click Yes and follow the onscreen instructions
For the cost you will enter that FMV, also enter in any cost for improvements made after the date of inheritance. You will enter in any costs to sell the property and then if you lived in the home for more than 2 out of the last 5 years, you would qualify for an exemption of the gains. Single $250,000 and Married Filing Jointly is $500,000.
If you did not live in the home, the only difference would be that you would enter the sale:
You'll make the entry by clicking on the Federal Taxes tab, then Wages & Income, then scroll down to Investment Income and select Stocks, Mutual Funds, Bonds, Other.
Respond "yes" to Did you sell any investments? You'll then be asked Did you get a 1099-B or brokerage statement? and you'll answer "no." Then you'll be shown a list of various investment sales and you'll select "land."
You'll be taken to the screen that says Enter Land Sale Information and you'll be able to enter your information. Be aware of the tiny box that says "I paid sale expenses not included in proceeds," as it must be checked if applicable to you.
Then hit "continue" and follow the prompts, where TurboTax will ask you follow-up questions.
Since you did not live there you would not be able to take the exemption.
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Katie S.
Katherine S 63
