Hello, I am still a bit uncertain about inputting loss of sale of an inherited house. Below shows the data and my TurboTax input attempt. Please advise. Thank you.
Data –
Inherited house, sales price on 1099-S is $100,000. This is the only amount shown on 1099-S, and there are no other amounts such as closing costs on this form.
Appraised value at time of death - $90,000
Improvements after time of death - $3,000
Closing costs - $6,000
Repairs and maintenance such as well pump replacement, siding repairs, and lawn mowing from date the house was advertised for sale to date of sale - $7,000
Sale date – 5/10/2024
Below was the input that I used - one earlier post told me to choose “other”, another post told me to choose “land (other investment purpose)”. Which option is correct to use?
“Wages and Income” Topic
“Investment Income” section – choose the Stocks, Crypto….. line
Next screen – click the add sales button
What type of investment did you sell - Choose “Other”
How did you receive this investment – choose “I inherited it”
Description – house address
Date sold – sales date on settlement stmt, 5/10/2024
Proceeds – sales amount on 1099-S, $100,000
Fair Market Value – appraised at time of death, $90,000
Next screen –
choose - I paid sales expenses not included in the sales proceeds on form (1099-S)
There is only one input box designated for sales expense. How do I input the improvements of $3,000, closing costs of $6,000, and repairs and maint. costs of $7,000. Total would be $16,000. Do I put the whole $16,000 as sales expenses, and thereby as “adjustments”? I did that as a test. Form 8949 shows the following;
a – description - house address
b – date acquired – INHERITED
c – date sold – 5/10/24
d – proceeds - $100,000
e – cost basis - $90,000
f – code – “E”
g – amount of adjustment – negative $16,000
h – gain/loss – negative $6,000 (loss)
Additional Questions -
1. An earlier reply post said I could leave form 8949 column f Code “blank”. TurboTax put code E on column f automatically after I input the $16,000 as sales expenses. There is no option for me to leave column f “blank”. which is correct since there is no option to leave column f "blank" when I use TurboTax?
2. I was told that since I have a 1099-S, the amount on the 1099-S must match with the amount of proceeds shown on form 8949 column d. Is it correct?
2. As I asked in my earlier posts, the loss on sales of an inherited house is allowed as capital loss to offset other capital gains and also against incomes such as wages and interest/dividends? If I have other capital gains of $10,000, the $6,000 loss on sales of the inherited house is fully allowed, so I would have only a net capital gain of $4,000 ($10,000 gains from stock sales minus $6,000 loss from sale of inherited house)?
