I sold my home. My husband died. His children inherited his half of the house. How do I enter this in Turbo Tax?

[hborton]

I sold my home which we built in 2005. Form 1099-S shows the gross proceeds 325,000 and Allocation of proceeds to me of 162,500.  My husband died in Feb of 2014, and I had a life estate until I sold it in Jul 2018.  His children inherited his half of the house. How do I enter this in Turbo Tax? I have detailed  accounting of house and improvements. What info on the basis should I send to the children?

[IreneS · Accepted solution]

I am sorry for your loss!

If the house was your personal residence for two of the last five years, gain of up to $250,000 ($500,000 for married filing jointly) is excluded from tax and normally you do not have to include the information in your return.

However, since you received Form 1099-S for the sale, it does have to be reported on your return.   Since you owned one-half, enter half of the total expenses (settlement costs, improvements, etc.) and proceeds   Then you can pass that same information on to the children (and they will report the other half).

To enter the sale of your principal residence in TurboTax, please follow these steps:

1. Click on Federal Taxes > Wages & Income
2. Under Less Common Income, click on the Start/Revisit box next to Sale of Home (gain or loss).  
3. On the screen Sale of Your Main Home click the Yes box.  
4. On the Sold A Home screen, review the information you will need to enter and click Continue.  
5. Continue through the interview, entering the requested information.
6. On the screen, Tell Us About the Purchase of Your Home, you will need to enter the Adjusted Cost Basis.  For help in calculating the adjusted cost basis, click on the EasyGuide box.

Once you've entered all the information, TurboTax will calculate the gain for you.