We sold an inherited house. How do we account for expenses paid to prepare the house for sale?

shill6 · ‎June 4, 2019

We have the cost basis from the Settlement Statement (HUD-1), and know the itemized expenses to prepare for sale. We have accessed the TurboTax section for "sale of a second Home". There does not seem to be a section for itemizing these expenses. The only hint I have seen is to combine them with the inherited cost basis to raise the values to compare with proceeds to determine profit or loss. If this is the correct way to do this, I will still need to document thes expenses for the IRS. How is this accomplished?

PatriciaV · ‎June 4, 2019

Yes, selling expenses are added to your adjusted basis in the house (this may include repairs you were required to do before closing, for example, from an inspection) for input in TurboTax under Sale of Second Home. Although this was an inherited house, you may find this info helpful: IRS Pub 523 Selling Your Home

Other improvements completed before the property was listed are directly added to your inherited basis. See IRS Pub 551 Basis of Assets.

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susieb · ‎June 4, 2019

Does Turbo Tax have fields for you to enter the expenses or do you just add them to basis before entering that number. Also, are repairs to window screens and yard work to get the house ready for sale considered selling expenses?

We sold an inherited house. How do we account for expenses paid to prepare the house for sale?

Deductions & credits

Deductions & credits