Carl
Level 15

Investors & landlords

Enter the rental property a 2nd time in the assets/depreciation section with 1/2 of the values for cost and cost of land. Take note that if the property remained a rental after one owner passed, then this should have been done in the year of their passing (2017 I presume) and depreciated accordingly. If that was not done and depreciation was not taken in 2017, 18 and 19, then the only way to correctly fix this is with IRS Form 3115. While the program does include that form, it's not simple by any stretch and requires professional help. So you may need to seek professional help this year for filing the 2020 taxes, correctly reporting the sale, and accounting for the depreciation that should have been taken in the increased basis.

Professional help is especially called for if your state taxes personal income, and I know that Ohio does. So having not taken depreciation on the stepped up basis can (and will) be a double whammy. So seek professional help to help keep the cost of that "whammy" down. Paying for professional help will be significantly cheaper in the long run.