The house may qualify as investment property as evidenced by your actions to immediately prepare it for sale after you inherited it, coupled by your not using it for personal purposes. If so, a loss sustained on it could be deducted.
The other problem you have is proving that is was sold for less than the fair market value you assigned to it when you took possession of it. The IRS could argue that it was worth what you sold it for, being that you sold it soon after the valuation date. Assuming you have a reasonable basis for the fair market value you assigned to it, the loss may be allowed by the IRS.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
