It depends. The inherited investment is allowed to use the cost basis as the fair market value (FMV) on the date of death. If you sold it relatively close to the date of the death of the original owner, then you will have your cost basis. Also, inherited property is considered held long term so you can choose 'Something other than a date' and use 'Various' as the date acquired.
This would be considered as an investment and should be entered as follows:
- Open or continue your return (you can choose the Search box and type 'sale of second home' then use the Jump to link to enter your inherited sale) or follow the menu.
- Under Wages & Income scroll to Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B)
- Answer Yes on the Did you sell any stocks, mutual funds, bonds, or other investments in 2021? screen
- If you land on the Your investment sales summary screen, select Add More Sales
- On the OK, let's start with one investment type screen, select Other, then Continue
- On the Tell us more about this sale screen, enter the name of the person or institution that brokered the sale
- On the next screen, select Other (choose this also for inherited homes) then select I inherited it under How did you receive this investment? (For TurboTax CD/?Download you can enter a description of 'Inherited Home' and long term holding period.
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