Absolutely, the IRS gets a copy and without you reporting the circumstances, all they see is the gain.
Here is information on where to enter the sale of stock:
To enter an investment sale from a brokerage account (1099-B), follow the steps below.
- Click on Federal Taxes
- Click on Wages and Income
- Click on I'll choose what I work on
- Under Investment Income
- On Stocks, Mutual Funds, Bonds, Other, click the start or update button
When asked how you got the stock, there is a place to indicate that it was inherited.
