When you sell inherited land, the sale is subject to capital gains tax. The gain is calculated based on the difference between the selling price and the stepped-up basis, which generally is the fair market value (FMV) of the property at the time of the decedent's death (unless otherwise elected by the executor).- See IRS information here.
To enter in TurboTax follow steps below:
Because these types of sales are considered investment sales, enter this info in the investment section of TurboTax.
You’ll have to use TurboTax Premium to report the sale of a second home, an inherited home, or land.
- Open or continue your return.
- Navigate to the sold second home screen:
- TurboTax Online/Mobile: Go to sold second home.
- TurboTax Desktop: Search for sold second home and select the Jump to link.
- Answer Yes on the Did you have investment income in 2024? screen, then Continue.
- If you land on the Your investments and savings screen, select Add Investments.
- Follow the onscreen instructions.
