topic Inherited a home in 2009, sold in 2019. I must pay taxes on the appreciated value but I have it wrapped in an LLC because of expenses. What form do I use? in Deductions & credits

Inherited a home in 2009, sold in 2019. I must pay taxes on the appreciated value but I have it wrapped in an LLC because of expenses. What form do I use?

Bacabrewsaw — Fri, 31 Jan 2020 15:19:23 GMT

Re: Inherited a home in 2009, sold in 2019. I must pay taxes on the appreciated value but I have ...

ColeenD3 — Fri, 31 Jan 2020 15:45:49 GMT

It appears that you used it as a rental, since you have an LLC. You would enter it in the rental section. If you used it for at least 2 out of 5 years, you can take the exclusion in this section as well. See the entry directions below. If you never used it for business, nor lived in it, follow these steps.

• Select Federal
• Select Wages and Income
• Select Show More at Investment Income
• Select Start or Revisit at Stocks, Mutual Funds , Bonds, Other
• Select No you did not get a 1099-B for this transaction
• Select Everything Else for type of Investment

Rental

Search for rentals and then click the "Jump to" link in the search result.
Answer Yes to the question Did you have any rental or royalty income and expenses?
Follow the on-screen instructions as you proceed through the rental and royalties section.

Re: Inherited a home in 2009, sold in 2019. I must pay taxes on the appreciated value but I have ...

Bacabrewsaw — Fri, 31 Jan 2020 15:53:39 GMT

Hello and thanks for your help. The home was never rented, it sat vacant for 10 years so I had expenses to clean it up along with attorney fees. I set up the LLC for liability purposes. Does that change things? In past years I've used the Sch C to deduct these expense.

Re: Inherited a home in 2009, sold in 2019. I must pay taxes on the appreciated value but I have ...

ColeenD3 — Fri, 31 Jan 2020 16:08:17 GMT

You should not have deducted any expenses from Schedule C as you never had a business. It sat empty. It did not produce income. This was your personal property.

"One of the main purposes of an LLC is to provide liability protection for the members and managers. Unlike some other business structures, such as a sole proprietorship, an LLC structure protects the personal assets of the owners from business liability." LLC

Expenses of personal property upkeep are not deductible. If you made any major improvements to the property from the time you inherited it until you sold it, these amounts are added to the basis.