The CPA is correct, the cost basis is the fair market value of the home on the date
of death of your aunt.
When you report the sale of your portion of the property on
your return, you will use one fourth of the total cost basis since you will
only be reporting one fourth of the total proceeds from the sale.
This type of sale is entered as a sale of an asset that will
be reported on Schedule D for capital gains.
Using TurboTax, take the following steps to get to that section of your
program:
- Using the search
box in the upper right corner, type “inherited
home – home sale”. Then click Find.
- The search
results will show a link to Jump to
inherited home – home sale.
Click that link.
- This will bring
you to the correct section in the program.
Answer the question about selling an investment with Yes.
- Answer the
question about receiving a 1099-B with No.
- Choose Everything Else as the type of
investment sold (not Second Home).
- Proceed with the
interview and answer the questions reporting only your share of the net
proceeds of the sale. Be sure to
also adjust the fair market value of the property to only consider your portion
of the value since you only owned a portion of the property.
