The land contract was inherited in 2017 after the death of my father in and is being divided between three siblings. All of the capital gains taxes were paid prior to his death. I will report 1/3 of the interest income form the payments received in 2017, but wondering if I need to record the inherited land contract under installment sales or if I need to enter it at all in Turbo Tax.
Thanks!
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If you are saying the land contract was completed and deeded over to the buyer in 2017 before you inherited it, then you do not need to report it. (You said that all capital gains have been paid or is that "so far").
If the land contract is ongoing and has not been completed and deeded to the buyer yet, then you do need to report the capital gain on the installment sale on your 1/3 of the property. You do receive a stepped up basis, however, which will help reduce the capital gain: use 1/3 of the stepped up basis as the cost to subtract from your portion of installment sale to arrive at the capital gain.
The basis of property inherited from a decedent is generally one of the following:
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