Thanks for your reply Diane!
Just to be sure I am interpreting your reply correctly, the ONLY cost included in our escrow disclosure that I shared previously which were charged to us as the seller which CANNOT be included in the basis adjustment is this one:
County Taxes from Jan 2020 to closing date……………………………………………………$731.98
Do I have that right?
And OK to include in the basis adjusment all of the expenses incurred to prepare the property for sale as disclosed?
Can I also include the $425 (paid outside of escrow) for the FMV on Date of Death as a valid expense to include in the basis adjustment?
TurboTax tells me that this will result in a Long-Term Capital loss that is limited to $3000 for 2020 but the balance will be carried forward to future tax years. This is welcome news, but just concerned that the adjustments are indeed applicable to an inherited property that was not occupied or rented after the death of my mother-in-law and was sold within 3 months after the legal transfer was completed. I haven't found any language in any IRS document that confirms any of this so I just want to make sure I am handling this correctly from an IRS perspective!
