You do not pay tax on the full amount that you received. You pay tax only on any gain from the transaction. The gain (or loss) is calculated by subtracting your net proceeds from the Fair Market Value (FMV) of the property.
The FMV that you will use is the value of the property on the date that you received it (if it was transferred prior to her death, as a gift) or the date of your mother's death (if inherited.)
You should contact a real estate professional for some guidance in determining the approximate value. Once you have determined the FMV, here is how you will report the sale in TurboTax:
- Login to TurboTax.com
- Click on Wages & Income (you may need to first click on "Take me to my return" or "Pick up where you left off."
- Scroll down to the section Investment Income.
- Click on Show More.
- Click Start beside Stocks, Mutual Funds, Bonds, Other.
- Indicate that you did not receive a 1099-B.
- Proceed through this section of the program selecting Second Home when asked What type of investment did you sell?
- Enter the data requested by TurboTax (report only your share of the proceeds and an equal portion of the basis).
If there is a loss on the property, it will not be deductible.
Please accept my condolences on the loss of your mother.
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