Captial Gains on sale of inherited property

[mmoorefam4]

I inherited my mom's home in September 2020.  I sold it in June 2021.  I have a capital gain from the sale and I need step by step instructions on entering it in TT Premier.  I have a 1099-S with the gross proceeds.  I also have an appraisal at the date of death.  The difference between the two is a $60000 gain.  I don't know exactly where to report this and would like step by step instructions.  I see instructions from previous years in the forum, but TT premier 2021 looks different.  I would love some help on this!  

[LeonardS]

The cost basis of the home will be its fair market value at the time of your Mon's passing. 

Form 1099-S list the gross proceeds from the sale from which you will deduct expenses related to the sale.

Generally, these expenses can be deducted as selling expenses:

• Appraisal fees.
• Inspections.
• Loan origination fees.
• Title fees.
• Transfer fees.
• Mortgage interest.
• Mortgage points.
• Real estate property taxes. 

To report the sale of the house in TurboTax follow these steps:

1. Open or continue your return
2. In the search box, search for sold second home and select the Jump to link
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 Second Home (choose this also for inherited homes) or Land and answer the questions to finish entering your sale

This link Where do I enter the sale of a second home, an inherited home, or land on my 2021 taxes? has information you may find useful.

[mmoorefam4]

I have another question regarding the reporting of the capital gains for inherited property.  I have the downloaded version of Turbo Tax 2021.  The only way I have found to enter the info is to say I didn't receive a 1099-B for the sale.  I then entered the information as a new sale but there was not anywhere to select 'other' to say that it was a home sale.  It looks like the instructions you gave me were for the TT online version.  So, I am wondering if I put the information in correctly.  In the description of the sale, I put the address and then just put in the other info.  Is this correct?  I can't find anywhere else to enter the information as TT download doesn't have anything about a second home or inherited property listed.  Thank you for your help!

[MayaD]

That's correct it is different in TurboTax CD/Download:

1. Open or continue your return
2. In the search box, search for sold second home and select the Jump to link
3. Answer Yes on the Did you sell any investments in 2021? screen
   • If you land on the Your investment sales summary screen, select Add More Sales
4. On the Did you get a 1099-B or brokerage statement for these sales? screen, select No
5. Answer the questions and continue through the screens to finish entering your sale

Where do I enter the sale of a second home, an inherited home, or land on my 2021 taxes?

In general your cost basis is the fair market value of the items on the decedent's date of death.

The executor or administrator of the decedent's estate may give you an alternative value. If they do, use that amount instead of the value on the date of death.

[mmoorefam4]

Thank you for your help!  I feel more confident knowing there is a difference with the download vs. the online versions of Turbo Tax.  I don't know why they would be different!  Anyway, I followed the instructions for inputting the information.  I haven't found anywhere in the downloaded version a place to say that it was a home that was sold other than putting in the address as the description.  Should that suffice for the information I need to report?  Thank you!

[AmyC]

Yes. Make sure you have long term selected and double check your entries against my answers below. In the desktop program, you followed the steps above your post to 1099-B, No then:

1. I'll enter one sale at a time
2. Continue
3. Description, Inherited house (or the address)
4. Date sold, sale date
5. Date acquired, inherit
6. Sales proceeds, 1099-S amount
7. Basis, inherited value plus sales expenses
8. Holding period, long term
9. Continue
10. Done
11.  

[mmoorefam4]

Thank you!!  A wonderful help to me!  Are you sure that I select long term even though my mom passed in September 2020 and I sold the home in June 2021?

[KrisD15]

Yes

"For inherited property, the holding period will always be "long term," and your cost basis will be the value of the property on the date of death of the original owner (unless the estate elected an alternate valuation date, but this is not common). "

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