Adjust basis on sale of 2nd home that was gifted to me 18 years ago

I was gifted a property in 2002. Used it as a 2nd home. I made many improvements over the years that would increase my basis. How do I adjust the basis in TurboTax? In the walkthrough, I entered it in the Investments section (I'm using TurboTax Home & Business). I marked that I received the 2nd home as a gift. I entered the FMV at the time of the gift and the donor's cost basis.  However, this was 18 years ago. How do I enter in adjustments to my basis since I've spent money over the years (new roof, replaced the entire concrete driveway, etc).?  I assume I need to make these adjustments on form 8949, but there isn't one in my listing. How do I force TurboTax to create one, and then how do I adjust the basis of the capital gain?

Carl
Level 15

Investors & landlords

Work through the sale again. There's a "learn more" link next to "Fair Market Value on Date of Gift". Click it. It reads:

The cost or basis of property is usually the original cost of the property, adjusted for various items after you acquired it. Additions to basis include improvements you made to the property and nondeductible assessments for improvement.

Therefore you will add the cost of the property improvements you did, to the amount in this box.

If you click the "learn more" link next to Donor's cost basis, you'll see the same applies to this box also.

 

Investors & landlords

Thank you!  Also, should I adjust both the FMV and Donor's basis for the basis adjustments I made in the 18 years I've owned it?  If I only adjust the FMV for the basis improvements I've made, its still showing a large gain.

Investors & landlords


@makosarko60 wrote:

...should I adjust both the FMV and Donor's basis for the basis adjustments I made in the 18 years I've owned it? 


Yes, you should adjust both for any adjustments (most likely improvements) you made during the time you held the property.

 

See https://www.irs.gov/faqs/capital-gains-losses-and-sale-of-home/property-basis-sale-of-home-etc

View solution in original post

Carl
Level 15

Investors & landlords

should I adjust both the FMV and Donor's basis

Yes. That's basically what I said in my first response.

I myself don't understand why the program asks you for the same exact thing twice, with two different questions.