Inheriting a home

Forum|Forum|5 years ago
March 7, 2021
12 replies
74 views

I live in Kentucky but inherited my mothers house in Illinois. I sold the house at a capital loss. Turbo Tax is wanting me to file a non resident Illinois state tax return. I was told by my moms CPA I wouldn't have to file an Illinois return because there wouldn't be a capital gain. So I'm confused. I would hate to have to pay for another state if it's not necessary. Need Help

Best answer by MaryK4

Your CPA is correct. An individuals must file if they earned enough taxable income from Illinois sources to have a tax liability. Since you had a loss there is no Illinois capital income. If you have it on your return, see How do I delete my state return in TurboTax Online.

MaryK4Answer

Level 15

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sparkedup1744Author

Level 2

Thank you! I just want to get this straight for sure. When filling out turbo tax...the cost or other basis equals the FMV of the home at time of death? The sale proceeds is the amount the home was purchased for(which happened to be the same as the FMV), minus all the deductions it costs to sell the home(from the Title company's settlement statement). Is this correct? So the sale proceeds would be the actual check received from the Title company? I was using this as a capital loss because the FMV of the home was more than what I physically received a check for. I haven't received a 1099-B or 1099-S for this! I also read I was not allowed to use home improvements, such as new carpeting and new paint as a deduction? Lastly, an inherited property is long term not short term. I've read so many different articles on that, not sure what it is. Thanks again!

ColeenD3

Level 15

Yes and no. You got the basis part right. It is the FMV on the date of death. Expenses of the sale, listed below, are added to the basis. Yes, it is long term. A new carpet is an improvement and is added to the basis. Painting is a repair and is not.

The sales price is not adjusted in any way. It is the amount on Closing Disclosure (Hud 1) that is the Contract Sales Price.

If you sold it immediately after death, then you may well have a loss. A personal loss is not deductible.