You, your wife and your mom each owned 1/3 of the house.
On the date of your mother's passing you and your wife inherited your mother's share. The value that you inherited is the value on the date of your mother's death. So you figure out what that value is and you take 1/3 of it.
The other 2/3 of your basis are based on what you paid for the house originally as well as any major improvements that you made to the home over the years. Figure out that value, take 2/3 of it and add it to the 1/3 that is your new inherited basis.
You can also take any expenses of sale (repairs and whatnot to get the place ready to sell) as well as the costs of the sale itself.
Figure all this out and enter the results into TurboTax. You don't need to show your work on the tax return. You do need to keep all the documentation proving your numbers on file, though. If you're ever asked to prove it be sure that you can.
@scrimminger1
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