Get your taxes done using TurboTax

For sale of inherited land, TurboTax Deluxe is the version to use.  TurboTax Premier is for people who are renting real estate or selling stocks and bonds.
 

Any profit you gain from the sale of the inherited home becomes capital gains. You need to figure your basis for the home. That is normally the value of the property on the day that the owner of the home died.

Your total basis will be the inherited basis plus the cost of repairs & improvements. 

Here are the steps to enter the sale of the inherited home into TurboTax

1. Once you are in your tax return, click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
2. Next click on “Wages & Income” ("Personal Income" in TurboTax Home & Business)
3. Next click on “I’ll choose what I work on” (jump to full list)
4. Scroll down the screen until to come to the section “Investment Income”
5. Choose “Stocks, Mutual Funds, Bonds, Other” and select “start’ (or “update” is you have already worked on this section)
6. The first screen will ask if you sold any investments during the current tax year (This includes any sale of real property held as an investment property so answer “yes” to this question)
7. Since you did not receive a 1099-B, answer “no” to the 1099-B question
8. Choose type of investment you sold - select everything else
9. Some basic information:
   1. Description –  Usually the address of the property sold
   2. Sales Proceeds – Net proceeds from the sale (on 1099-S amount received for the property) Do not include closing costs here. Instead increase the basis by any allowable closing costs. Please refer to  IRS - figuring basis on property  for information about allowable closing costs.
   3. Date Sold – Date you sold the property (on 1099-S)
10. Tell us how you acquired the property - inheritance
11. Enter the date inherited
12. Enter the your fair market value - Fair Market Value of the property at the time of inheritance plus any capital improvements since inheriting it. (Also, you can increase the basis (FMV) by the allowable closing costs)
13. If you had a loss, on the question of "Did you use this property for business or investment?" If the inherited house was not used for any personal use (no family member lived in it or used it between the time of inheritance and the sale), you will answer that this was for investment.