You report your 1/8 interest as your sales price. The Fair Market Value (FMV) multiplied by 1/8 at the date of death is your cost basis.
Here's TurboTax data entry:
- Federal Taxes
- Wages & Income
- Scroll down to Investment Income
- Select Stock Mutual Funds, Bonds. Select you have not received 1099-B and continue through the interview; the category is Everything else. The cost basis is the Fair Market Value on date the deceased passed away. You will be able to put your description and sale information; indicate that property is Inheritance, you'll be guided through inheritance sale.
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