topic Form 8949 Adjustment in Get your taxes done using TurboTax

Form 8949 Adjustment

mjwdew — Wed, 05 Mar 2025 15:03:54 GMT

I am using TurboTax online. We sold an inherited house last year and have capital gains. Do I have to provide supporting documents for the adjustments used increase my cost basis (improvements, real estate fees, etc.) I know the amounts but don't have receipts for all of the expenses incurred over the last 10 years.

Re: Form 8949 Adjustment

JohnB5677 — Wed, 05 Mar 2025 16:05:53 GMT

Yes, you must maintain supporting documents, but you do not have to include them when filing your tax return.

If you don't have receipts, document the circumstance and all of the information you can gather.
You would have to have this available if the IRS were to question it.

What was the status of the house for the past 10 years

Did you live in it?
Did you rent it?
Was it vacant?

This will affect the way you report the Capital Gain

Re: Form 8949 Adjustment

mjwdew — Wed, 05 Mar 2025 20:05:03 GMT

Thank you for responding.

The house was lived in by my Father-in-law's girlfriend (long story!) just so that it would not be vacant. We maintained it. She paid us just enough to cover taxes and insurance. Over the years, we replaced plumbing, fixtures, HVAC, hot water heater and front porch so we were out more than it was valued at the time we inherited it.

Re: Form 8949 Adjustment

PatriciaV — Thu, 06 Mar 2025 17:21:50 GMT

Since you didn't report this property as a rental, this is treated as the sale of an inherited property.

Enter this under Stocks, Cryptocurrency, etc.

Add a new investment (at the bottom), choosing "Other" investment type.
Enter a description like "Inherited Residence"
Type: Second Home or Other
Inherited it (important - it's always considered held long term which provides a special tax break)
Description: Address is a good choice
Date of sale
Proceeds from Form 1099-S
Fair Market Value (read "Learn More" link)
Enter sales expenses (if any)

TurboTax will calculate the gain (if any). You won't report a loss.