You will each need
to report your proportion share of the gain on your individual income tax
returns as the sale of a capital asset.
Click this link
for further information about reporting
the sale of a capital asset
- To enter this transaction in
TurboTax, log into your tax return (for TurboTax Online sign-in,
click Here and click on
"Take me to my return") and type "investment income (gains
and losses)" in the search bar then select "jump to investment
income (gains and losses)". TurboTax will guide you in entering this
information (see step 6 below)
Alternatively, To
enter this transaction in TurboTax Online or Desktop, please follow these
steps:
- 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 or show more income)
- Scroll down the screen until
to come to the section “Investment Income”
- Choose “Stocks, Mutual Funds,
Bonds, Other” and select “start’ (or “update” is you have already worked
on this section)
- The first screen will ask if
you sold any investments during the current tax year (This includes any
sale of real property held as an investment property so answer “yes” to
this question)
- Since you did not receive a
1099-B, answer “no” to the 1099-B question
- Choose type of investment you
sold - select everything else
- Some basic information:
- Description –
Usually the address of the property sold
- Sales Proceeds – Your
proportionate share of the net proceeds from the sale (your portion of
1099-S amount received for the property)
- Date Sold – Date you sold
the property (on 1099-S)
- Tell us how you acquired the
property - inheritance
- Enter the date inherited
- Enter the your fair market
value - Your proportionate share of the Fair Market Value of the property
at the time of inheritance plus any capital improvements since inheriting
it
- If you had a loss, on the
question of "Did you use this property for business or
investment?" If the inherited house was not used for any personal use
(no family member lived in it or used it between the time of inheritance
and the sale), you will answer that this was for investment
Click IRS
answers on Gifts and Inheritance for more information from the IRS on the
sale of an inherited property.
