inherited home sold to related party at loss

sallywing — Fri, 07 Feb 2020 21:02:29 GMT

TT Business shows a loss in Home Sales under Investment Income, but my accountant says that any loss is not deductible by the Trust/Estate. Why does TT show the loss? What should I have entered when answering TT questions to be sure that the loss doesn't show on the tax return?

Re: inherited home sold to related party at loss

Anonymous_ — Sat, 08 Feb 2020 00:30:50 GMT

@sallywing wrote:

TT Business shows a loss in Home Sales under Investment Income, but my accountant says that any loss is not deductible by the Trust/Estate. Why does TT show the loss? What should I have entered when answering TT questions to be sure that the loss doesn't show on the tax return?

Because you sold to a related party, the loss is not deductible.

See https://www.irs.gov/publications/p550#en_US_2018_publink100010464

The instructions relate to Form 8949 and Schedule D. Essentially, you need to somehow get an "L" code into column f and the nondeductible loss adjustment into column g of Form 8949.

See https://www.irs.gov/instructions/i1040sd#idm140545990419792

Obviously, you will need to accomplish the foregoing using Forms Mode; Step-by-Step does not appear to be programmed for related party transactions of this nature. I would suggest that you contact Support (link below) for further instructions regarding how to enter the transaction in Forms Mode.

https://ttlc.intuit.com/community/using-turbotax/help/what-is-the-turbotax-phone-number/00/25632

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inherited home sold to related party at loss

Re: inherited home sold to related party at loss