Inherited Property Sale

Forum|Forum|3 years ago
March 12, 2023
2 replies
39 views

My sister and I inherited our mother's house when she died last year. We got an appraisal for date of death. We just wanted to get rid of the house so we sold it for a good bit less than the appraised value. This is a Capital Loss correct? We split the proceeds evenly. If I do report it on my taxes where do I do so? I'm using TurboTax Premier 2022. I should also add that the home is located in TN and I am located in VA. Any help would be appreciated at this point.

Not A Product Question

Best answer by rjs

Expert Reviewed

What if the house sat vacant for the 4 months between the time of the decedents death (was their primary residence) and the sell date by the beneficiary? Can it be classified as investment property where a capital loss would be allowed or is it treated as personal use property since it was the home of the decedent?

@Ken1122

Personal use means use by the seller, not by the decedents. If the house "sat vacant" from the date of death to the date of the sale, you did not use it. You can claim the loss.

Mike9241

Level 15

yes it is a capital loss so it gets reported on form 8949 which is carried to schedule D.

Mike9241

fanfare

Level 15

Figure the sale as if one person sold it,

then each of you puts one half of those amounts on your tax return.

an inherited house sale is always Long Term, so report on Form 8949 Page 2.

@cosbycd1

rjs

Level 15

Enter the sale in TurboTax as an investment sale, the same as a sale of stock, but for which you did not get a 1099-B. For the date acquired enter the word "Inherited" instead of a date. TurboTax will make the necessary entries on Form 8949 and Schedule D.

Federal Taxes
Wages & Income
I'll choose what I work on
Investment Income
Stocks, Mutual Funds, Bonds, Other

ChannelD

Level 2

Thanks for the help with this. I read through the thread and it helped me get started.

I too inherited a house and sold it a couple months later. It was just the time it took the transfer on death deed to be filed. I hired a realtor and it sold pretty immediately.

Assuming FMV to be the same as the sale, what is the best way to handle Proceeds and Cost figure on Schedule D? Should I put the full house sales price for both? Or should I put in the actual proceeds check amount I got after sale for both?

There was a payoff and listing fees, but those all came out of the proceeds before I got it so I don't want to complicate things. If it is acceptable to list it either way, then that would be helpful.

RobertB4444

Level 15

The sale price should be entered as a full sales price and the basis as the same number. You can then enter the costs of the sale separately in the area for that. You'll get a credit for the costs as a capital loss.

@ChannelD

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"