sale of inherited foreign property

[lizC]

My father passed away in 2019.  Under Italy's forced heirship laws, my mother and 6 children inherited ownership of my fathers (U.S. citizen) home in Italy.  We sold the home in 2024 my mother received 1/3 of the proceeds and 6 children received 1/6 each of the remaining 2/3 of the proceeds.  The sale price was $44,000. 

First question is, do we all need to report receiving this money?  

Second question is, if we do need to report it, then do we divide up the cost basis also in similar portions?  The FMV of the home basically did not change from my fathers death in 2019 to the time the house was sold in 2024, which is a very low FMV.

Third question is, if we are required to report this sale, do we use forms Schedule D and 8949?

Thank you

[RobertB4444]

You are required to report the sale.  

As you surmised the basis is divided among the heirs in the same way that the proceeds were.  It will be entered on schedule D and form 8949, although in TurboTax you will just scroll down all the way to the bottom of the Wages and Income section of your federal return and find "Less Common Income".  About midway down that section is an entry for 'Sale of Home'.  

Click on that and enter the information about the sale and the system will put the information on the proper forms for you.

@lizC 

[lizC]

Under other income, sale of home, this is only for the sale of your main home.  It says to report other sales of homes in investment income but it doesnt say which section there

[SharonD007]

You will enter the sale of your inherited property in Investments in the Wages & Income Section. Refer to the TurboTax Help article Where do I enter the sale of a second home, an inherited home, or land on my 2024 taxes?

When you get to the screen below, select Other 1099-S. Even though you may not have a 1099-S, you can enter the information without one.