The reason the "date of acquisition" is "Inherited" is because it was an inherited property. Inherited property, when sold is treated as long-term, regardless of long it was held. Using inherited as the acquisition date tells the program and the IRS that the property was inherited, and to treat it as a long term gain.
For the closing costs and other expenses, you would include seller paid closing costs as adjustment to the proceeds. You would only enter 20% of the actual costs.
You can claim a capital loss on the sale of inherited property if all of the following are true:
- The sale was to an unrelated person.
- The house was sold in an arm’s length transaction.
- The property was not used for personal purposes.
- There was no intent by your husband and his siblings to convert the property to personal use before the sale.
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