Yes, you would include this on your tax return and it is considered a capital gain.
The basis of property inherited from a decedent is generally the fair market value of the property on the date of the decedents death.
To determine whether you have a gain or loss when you sold the property, you subtract its basis from the sale price.
Note: To report investment sales, you’ll have to use TurboTax Premier, TurboTax Self-Employed, or TurboTax Home & Business.
To enter the 1099-S in TurboTax:
- Open or continue your return.
- In the search box, type in sale of inherited home and select the Jump to link in the search results.
- Answer Yes on the Did you sell any stocks, mutual funds, bonds, or other investments in 2020? screen.
- On the OK, what type of investments did you sell? screen, select Other and then click on Continue.
- On the Tell us more about this sale screen, enter the filer’s name listed on your 1099-S.
- On the next screen, select Land and answer the questions to finish entering your sale.
