Do I have to report the sale on an inherited home?

mxk007 · ‎June 1, 2019

My mother in law passed away in 2016. Her home was willed to us and quit claimed while she was alive. After her passing, we sold the house in 2017. Do we have to report the proceeds of the sale on our 2017 return?

PaulaM · ‎June 1, 2019

Yes, because the home was gifted (quit claimed) while your mother in law was living. Enter the sale under the Investment section. Even if the home was inherited (title passes after death), the sale would still be entered on your tax return, but the basis would be stepped up to the date of death fair market value (FMV).

You will need to know her adjusted basis and FMV of the home at the time of the transfer. Capital gains/losses are completed in this section.

You used the word 'we'. I'm assuming that is your spouse. If not, then record the sale for just your proportionate share.

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PaulaM · ‎June 1, 2019

Yes, because the home was gifted (quit claimed) while your mother in law was living. Enter the sale under the Investment section. Even if the home was inherited (title passes after death), the sale would still be entered on your tax return, but the basis would be stepped up to the date of death fair market value (FMV).

You will need to know her adjusted basis and FMV of the home at the time of the transfer. Capital gains/losses are completed in this section.

You used the word 'we'. I'm assuming that is your spouse. If not, then record the sale for just your proportionate share.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

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Do I have to report the sale on an inherited home?