The bottom line is that if you inherit property and later sell it, you pay capital gains tax based only on the value of the property as of the date of death. “If you needed to make home improvements in order to sell your home, you can deduct those expenses as selling costs as long as they were made within 90 days of the closing.
Examples of common property repair and maintenance expenses that are generally deductible in computing rental business profits include:
- exterior and interior painting and decorating,
- stone cleaning,
- damp and rot treatment,
- mending broken windows, doors, furniture, and machines such as cookers or lifts,
- re-pointing, and
You can enter this info in the investment section of TurboTax. Select the product you’re using for the right instructions.
Note: To report investment sales, you’ll have to use TurboTax Premier, TurboTax Self-Employed, or TurboTax Home & Business.
Sale of inherited home
- Once you are in your tax return, click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
- Next click on “Wages & Income” ("Personal Income" in TurboTax Home & Business)
- Next click on “I'll choose what I work on” (jump to full list)
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