topic Posted In Education By Mistake: Sale of Inherited House After 10 Years, Not Rented, Not Lived In in Get your taxes done using TurboTax

Posted In Education By Mistake: Sale of Inherited House After 10 Years, Not Rented, Not Lived In

bonrea2000 — Thu, 20 Jan 2022 19:10:50 GMT

My Father-in-law passed away in 2010 and my wife and her sister and brother just sold the home in 2021. The property was in all of their names. The money from the sale of the house was dispersed evenly amongst the four. They owned it for almost 11 years. Never lived in it and never rented it. They just kept it up. Would this be considered a sale of a second home, inheritance or....? I don't know how to report the income here.

Re: Posted In Education By Mistake: Sale of Inherited House After 10 Years, Not Rented, Not Lived In

MayaD — Thu, 20 Jan 2022 19:24:10 GMT

You would report it as investment sale.

Answer “no” to the 1099-B question
Select Other for What type of investment did you sell?
Select I inherited for How did you receive this investment?
Increase the basis (FMV) of the inherited property by the allowable closing costs.

You can deduct the selling expenses from the gross proceed.

Sales expenses include:

commissions
appraisal fees
broker's fees
legal fees
advertising fees
home inspection reports
title insurance
transfer taxes or fees
geological surveys
loan charges (points) or other fees paid on the buyer's behalf
any fees for a service that helped you sell your home without a broker (listing fees, promotional fliers, etc.)

Re: Posted In Education By Mistake: Sale of Inherited House After 10 Years, Not Rented, Not Lived In

bonrea2000 — Thu, 20 Jan 2022 19:41:39 GMT

Thank you for the response.
Question: Because they owned it for more than 5 years, but didn't live it in for at least 2 years, they have to report it? It isn't exempt from the $500,000 value rule?

Re: Posted In Education By Mistake: Sale of Inherited House After 10 Years, Not Rented, Not Lived In

DianeW777 — Thu, 20 Jan 2022 21:47:44 GMT

Yes, that is correct. It does not qualify under the rules for a home sale.