Retirement tax questions

The sale proceeds could be reduced if at the time of inheritance you had a cost basis in the property.  Many times with mineral, oil or gas there is no cost to the owner, but if you had a valuation done after the death of the original owner you can check your documents to see if you have an inherited value of this asset.

If so, then that value can be used as a cost basis to offset the proceeds. If there was no value for these assets after death, and this land was already under contract with the companies who are extracting the oil, gas and/or minerals you may be able to go back to the company to receive the value on that date of death.

If you have no basis, then your cost will be zero and the sales proceeds will be taxed at the capital gains tax rates since inherited property is always considered held long term.

The sale of inherited property can be entered using the following instructions.  

1. 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.
2. Under Wages & Income scroll to Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B)
3. 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
4. On the OK, let's start with one investment type screen, select Other, then Continue
5. On the Tell us more about this sale screen, enter the name of the person or institution that brokered the sale
6. On the next screen, select  Other (choose this also for inherited homes) then select I inherited it under How did you receive this investment?