If the form 1099-S is issued with your social security number on it, then you should report it on your tax return as follows:
1. Go to the "Federal" section of TurboTax and click on "Income and Expenses"
2. Look for "Investment Income" and click on "Stocks, Mutual Funds, Bonds, Other"
3. Answer "No" to the question about receiving a form 1099-B
4. When asked what type of investment sold? answer "Second Home"
5. Enter the property address of the house sold and the proceeds reported on the 1099-S
6. Indicate that you inherited the home
7. Enter the date and fair market value of the home when you inherited it
If there is any income from the sale of the house reported as taxable income on the estate return or on your K-1 form from the estate, you can add your portion of that amount to the fair market value of the house as reported in step 7 above.
In other words, if there is a gain on the sale of the house and the estate paid income tax on it or you reported it as income on your return from the k-1 entry, then you are just reporting the form 1099-S just to show the IRS that is has been accounted for on your tax return.
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