Secondary home sale which was inherited from parent

[CG1563]

Spouse inherited parents home and was sold last year to relative.  House ownership was transferred to spouse.  What should be the cost basis of this "non primary" home?  FMV?  or Zero since it was just signed/transferred over

[AmyC]

You said two different things.

First- spouse inherited house - that means value of the house on date owner was deceased.

Second - house was transferred to spouse - by who? what was their basis?

Non-primary is irrelevant. The sale is a sch D sale of investment. The next issue is long term or short term. Inherited is long term. Transferred - could be short or long.

[CG1563]

Thank you Amy for the quick response...  

Sorry for the confusion..  the property was transferred from the Parent to her child (my spouse) 5 years ago.

The Parent (mother) passed away in 2022.

In regards to the cost valuation to determine a gain or loss (long term), no record of the cost basis because the property is 60+ years old (Parent was the original owner)  Suggestion on what can be used as a cost basis?

[AmyC]

The sale would be recorded in property deeds somewhere in the county and might be online. In over 60 years, there were bound to be some improvements, but how much was spent would be hard to determine.

If you are unable to identify a basis in the house, the IRS likes to use zero as the basis.

If you want to go deep, you could make a list of everything done to the house and look up historical prices for what was done and when.