PaulaM
Expert Alumni

Business & farm

I'm sorry for the passing of your mother in 2017. 

Inherited property is always considered long term regardless of how long you held the asset. 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.

Enter in the Investment section and choose 'Second Home' for type of investment sold.

Then enter the net proceeds from the sale. Continue on to enter that the property was inherited and the date of your mother's passing, and the FMV at the date of her passing. Continue to the gain/loss computation and entered on Schedule D. The sale is recorded on Schedule D even if a zero gain.

https://www.irs.gov/pub/irs-pdf/p551.pdf

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