Yes, you should enter the sale on your return and not through the K1. Since your cost basis is the fair market value (FMV) on the date of death, then the sale within three months of death would likely also be your cost basis. This is why the Estate Accountant said it would be a wash. You can enter the sale as follows:
It is considered investment property, report the sale using the steps below:
- Under Wages & Income scroll to Investments & Savings
- Select Start/Revisit beside Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B)
- Select Add Investments or continue to go through the screens to select 'Other' > Continue
- Begin to enter the sale description > Under Type select Other > Under How did you receive select 'I Inherited it' (if applicable)
- For TurboTax Desktop you would enter the description 'Inherited Property' and select 'Long Term' as the hold period
- Enter your sale date and 'Various' as the Acquired date (Select Something other than a date'
- Continue to complete the screens until you arrive back at the Wages & Income main page.
Please accept my sympathies for your loss.
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