Your cost basis for the inherited home
is the fair market value (FMV) at the date of her passing. This gives you a
stepped up basis in the property. The two of you will each enter your proportionate share of the sales proceeds and FMV on your return.
Enter in the Investment section
and choose 'Everything else' for type of investment sold.
Then enter 1/2 of the net
proceeds from the sale. Continue on to enter that the property was
inherited and the date of your mother's passing, and 1/2 of FMV at the date of her
passing . Continue to the gain/loss computation (if any). The sale is reported on schedule D even if the gain is 0.
Note: If you received a 1099-S for the sale be certain that it is for your share only. If not, contact the issuer for a corrected copy.
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