Your wife will split all items equally with her brother when reporting the sale.
The cost basis of the home will be its fair market value at the time of your parent's passing.
Generally, these expenses can be deducted as selling expenses:
- Appraisal fees.
- Inspections.
- Loan origination fees.
- Title fees.
- Transfer fees.
- Mortgage interest.
- Mortgage points.
- Real estate property taxes.
To report the sale of the house in TurboTax follow these steps:
- Open or continue your return
- In the search box, search for sold second home and select the Jump to link
- Answer Yes on the Did you sell any stocks, mutual funds, bonds, or other investments in 2021? screen
- If you land on the Your investment sales summary screen, select Add More Sales
- On the OK, let's start with one investment type screen, select Other, then Continue
- On the Tell us more about this sale screen, enter the name of the person or institution that brokered the sale
- On the next screen, select Second Home (choose this also for inherited homes) or Land and answer the questions to finish entering your sale
This link Where do I enter the sale of a second home, an inherited home, or land on my 2021 taxes? has information you may find useful.
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