I've inherited a home that was in a bypass trust. I'm using Turbotax Business since all income in the trust was always distributed. I'm stuck on the "Enter Asset Disposal Information." For the date of disposal I'm entering my Dad's date of death. Turbotax asks:
1. How much did the business receive for this building?
2. .... this land?
Do I just leave it as "0"? I am worried that it then looks like the property was donated to charity or took a loss or something. I am keeping the home and continuing to rent it out. Income/Expense since Dad's death are going on my personal tax return.
Thanks!
Are you distributing the rental home to yourself (as beneficiary) out of the trust?
If so, that is not really a disposition that needs to be reported on a K-1.
Thanks! I just figured it out. 🙂 On the screen before I needed to click "yes" and then it stopped trying to make me put in the selling price.
I'm not sure how it's presented to you on the 1041, but I think the screen you're looking for says something like "Special Handling Required?" You would click yes on that screen. Click no, and you are forced to enter sales information.
Oops, I spoke too soon. When I look at the 1041 it is subtracting the value of the house as an ordinary loss. :( So something still isn't right. So on Schedule E Property Summary I click on the rental property. When it asks "Tell us about your rental property" I click "This rental property was sold or otherwise disposed of during 2020." Clicking past the next several screens I get to "Rental Asset Summary" where it shows the property, date placed in service, date disposed & 2020 depreciation. I've already completed that info so I click "done" and go to "Select Disposed Rental Asset. Again it shows the date placed in service and the date disposed (my Dad's date of death). I click on "edit" which takes me to the "Like-Kind Exchanges and Casualties." I initially said "no" here which took me to that screen where it wants me to put in the price we sold it for (but house isn't being sold, just inherited). So then I went back and clicked "yes" and entered my Dad's date of death. (That's the screen that would be the "special handling required"... but it doesn't actually say that.)
But it's still showing the house as an ordinary loss on the 1041. Maybe what I need to do is just not bother "disposing" of the house. Maybe I should just take it "out of service" as of date of death? I will be reporting income from that point forward on my personal return.
Thoughts?
@klma wrote:Maybe what I need to do is just not bother "disposing" of the house. Maybe I should just take it "out of service" as of date of death?
Exactly!