turbotax icon
Showing results for 
Search instead for 
Did you mean: 
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

New Member

How to go about a sale of inherited property with siblings and attached mortgage?

Three siblings got deeded their dads property in 2016. Homes on property have been vacant since death.It had a mortgage of around $57,000 that they will pay when they sell the property. Appraisal was $110,000 on the property and they are selling it for $70,000. They have paid all bills including interest on mortgage and property tax all jointly. Not sure how to go about the joint sale of property including mortgage amount(and it's interest), and  the loss they are taking and splitting it up into 1/3 amounts.
This feature is pending. Thanks for your patience.
Didn't get the answer you wanted? Our digital assistant can help you.
2 Replies

How to go about a sale of inherited property with siblings and attached mortgage?

Simple ... you each should get a 1099-S for your portion of the sale and then you will also be prompted to enter your portion of the basis & costs and the loss will be recognized on the Sch D automatically.
Level 15

How to go about a sale of inherited property with siblings and attached mortgage?

Sale of Inherited Home

Sales of real estate are usually reportable on your tax return, especially if a form 1099-S is issued. There will most likely be no capital gain and therefore no tax. Any capital gain would be on the difference between what the house was worth on the date of the decedent's death (your "cost basis") and what the house sold for. 

The house was "investment property", since it sat vacant, you can deduct the loss.

Type> 1099-S, sale of property other than main home <in the find (search) box. Click Jump to. Say no when asked if you got a 1099-B. Then follow the rest of the interview.

You have an investment property. The carrying costs (e.g. insurance & utilities) of investment property are deductible as investment expenses, but are subject to being a misc. itemized deduction also subject to the 2% of AGI threshold. Real estate (property) tax may be deducted on schedule  A, under taxes, without regard to the 2% rule.

Alternatively, taxpayers can elect to capitalize (add it to your cost basis)  the carrying costs of unimproved and nonproductive real property, real property under development or construction and personal property before its installation or use (Regs. Sec. 1.266-1(b)(1)).  

Mortgage interest is only deductible to the extent of other investment income and not subject to the 2% of AGI rule,  but can be capitalized. 

If each sibling gets his own 1099-S (and you should as the closing agent to do it that way), they each report it that way. If only one of you gets a 1099-S; the other two can report their one-third anyway. The one getting the 1099-S will have to make an adjustment at the TurboTax Entry screen. There are a couple of ways of doing this, but the easiest is to just reduce the cost basis (110,000) by the capiatl loss reported by the other two. 

message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question
message box icon

Ready to start your taxes?

Hand off your taxes, get expert help, or do it yourself.

See Pricing
Manage cookies