Here are the answers to your questions. 1(a) - 1(e) are correct.
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? Yes or add them to the cost basis in (e) above.
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?
- Commissions, transfer fees, recording fees, title insurance, etc (do not add prorated property taxes or any mortgage interest on the settlement statement, these are itemized deductions if applicable).
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