Thanks for your reply Colleen! If you don't mind, can you have a quick look at these costs/expenses so I can make sure I know which ones to include and to confirm that I am filling out Form 8949 correctly?
Thus far for Form 8949 we have entered the following in Part II Long Term Transactions:
Checked “F” for “Long-Term transactions not reported to you on Form 1099-B”
1 (a) we described the property as “Inherited Home” along with the full address
1(b) we entered “Inherited” for the “Date Acquired” in lieu of the legal transfer date of 3/26/20 as per TurboTax Help instructions. Is this correct?
1 (c) we entered the Date Sold as “6/24/20” as per box 1 of Form 1099-S
1 (d) we entered “319,900” as the Proceeds of the Sale as per box 2 of Form 1099-S
1 (e) we entered “328,000” as the step-up basis as per the Date of Death FMV Appraisal
1 (f) Should we proceed to enter Code “E” to adjust her basis for certain expenses incurred to prepare the property for sale and/or costs incurred in escrow?
1 (g) Assuming Code “E” is entered above, which expenses/escrow costs should be included (which IRS approves without question) as permissible for the sale of an inherited property?
Below is a summary of all expenses incurred in preparing the home for sale and escrow costs incurred:
In preparing the home for sale and in making a number or repairs required in escrow, we incurred a total of $2,364 in expenses as follows:
$1114.93 for interior painting after water stain repairs
$501.00 for required electrical repairs per buyer’s inspection report
$158.00 for required HVAC repairs per buyer’s inspection report
$589.86 in misc fix-up expenses incurred
Do all of these expenses qualify to be added to the basis adjustment? If not, can you highlight which ones are OK to include or conversely which ones are NOT permissible?
In addition to the above expenses, can we also include the cost for the DOD FMV appraisal ($425 in this case)?
As far as Closing Costs are concerned , the following escrow costs were assigned to us as the Seller:
Loan Costs:
- “Origination Charges”:
Admin Fee…………………………………$949
- “Services Borrower Did Shop For”:
Title- Copies, Postage, FedEx ect….$75
Title- E-Closing Fee………………………$25
Title- Settlement Agent Fee…………$500
Title- Title Search Fee…………………..$85
Title- Wire Fees…………………………….$20
Loan Costs Subtotal…………………………….$1,654
Other Costs:
- E. Taxes and Other Gov’t Fees:
Recording Fee………………………………..…$43.50
State tax/ stamps to State of FL……$2,239.30
- H. Other
Lien Search…………………………………..$135
RE Commission to Listing Agent…..$6,648
RE Commission to Buying Agent…..$7,747.50
Title- Owner’s Title Insurance………$429.50
Other Costs Subtotals………………………$17,242.80
Total Closing Costs from Above…………….$18,896.80
We also contributed a 3% Credit in escrow to the Buyer per the agreed terms……..$8,648
And we were charged a “Title- Premium Adjustment” ………………………………………………..$1,245
Plus County Taxes from Jan 2020 to closing date……………………………………………………$731.98
Adding these 3 additional contributions to the “Total Closing Costs“ Above Comes equals a
“Total Due From Seller at Closing”……………………………………………………………………..$29,521.78
Can you identify which of the above costs can be included in 1(g) of Form 8949? This would be tremendously helpful! Thanks!
