Home Sale Worksheet not allowing word "INHERITED" as is required for Date Acquired

[diycpa]

Hi,  I completed the Home Sale Worksheet and the info properly went to the 8949, and the amounts made it to Schedule D.  The IRS requires that we put "INHERITED" in the Date Acquired area.  The only way I see that I can do that is to manually complete the upper portion of Sch D regarding the sale, but then I end up with two houses sales on my 8949.  

Do I have to just manually enter the house sale info on Sch D and forget the Home Sale worksheet?  Thanks!

[tagteam · Accepted solution]

Enter the transaction in the Stocks, Mutual Funds, Bonds, Other section rather than the Home Sales section.

Select No Financial Institution and enter "Inherited" for the date acquired (first screenshot).

If you are presented with the second screen, check the box as shown in the second screenshot.

[diycpa]

Thank you!  That worked, but I wasted a lot of time with the Home Sale Worksheet, which I just deleted to make Schedule D correct. 

Wonder if my $179 TurboTax Business software explained somewhere that the worksheet should NOT be used for inherited houses?

[tagteam]

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@diycpa wrote:

Wonder if my $179 TurboTax Business software explained somewhere that the worksheet should NOT be used for inherited houses?

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I will pass along that suggestion as it is absolutely a valid point.

The date of death can be entered as the date acquired in instances where the holding period is longer than one year. Of course, there is an issue when the home was acquired from a decedent and held for one year or less and the software should accommodate that scenario, which is common (or at least provide guidance).

[Opus 17]

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@diycpa wrote:

Thank you!  That worked, but I wasted a lot of time with the Home Sale Worksheet, which I just deleted to make Schedule D correct. 

Wonder if my $179 TurboTax Business software explained somewhere that the worksheet should NOT be used for inherited houses?

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That's not entirely true.  The "sale of your home" section is used for the sale of a home where you lived.  Property that was never "your home" (your personal residence) would be handled as an investment, as you ended up doing. 

It's entirely possible to live in an inherited home before selling it.  I suspect in that case (although I haven't opened the software to check) you would enter the date acquired (because a date is required in that field) but there would be another field for "how was the home acquired" and the choices should include purchased, gifted, and inherited, and that will make things work out ok.  (And it only makes a difference if you move into the home as your personal home but then sell in less than a year.)

[tagteam]

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@Opus 17 wrote:
The "sale of your home" section is used for the sale of a home where you lived. 

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Except the program interface is somewhat confusing since it reads "Home Sales", not "Sale of Your Home".

Frankly, both the business and personal programs need a facelift. This is DIY income tax preparation software and not many, apparently, can readily determine that they should list the sale of a home held for investment purposes under "Stocks, Mutual Funds, Bonds, Other".

[diycpa]

"This is DIY income tax preparation software and not many, apparently, can readily determine that they should list the sale of a home held for investment purposes under "Stocks, Mutual Funds, Bonds, Other"."

tagteam,  That is so true! I reviewed the Home Sale section again and nothing there mentions reporting the home as an investment.  It merely asks if you lived there, and if you check No, it then asks for these things in this order:

-Address

-Date Sold, Selling Price, and Selling Expenses

-Was this home used for personal purposes on ? (That is not my typo)

     Yes, the home was being used for personal purposes as of the date of sale

     No

-Enter Basis of Home (It ends with this regardless of your Yes or No answer)

-Home Sale Result

So, that is all there is for Home Sale, and that's a problem for TTax users!

[diycpa]

Opus 17,

Re, "The "sale of your home" section is used for the sale of a home where you lived.  Property that was never "your home" (your personal residence) would be handled as an investment, as you ended up doing."

I cannot find that information anywhere in the Business software I bought.

Re, "It's entirely possible to live in an inherited home before selling it.  I suspect in that case (although I haven't opened the software to check) you would enter the date acquired (because a date is required in that field) but there would be another field for "how was the home acquired" and the choices should include purchased, gifted, and inherited, and that will make things work out ok."

I opened the software to check and it's not there.  TTax could explain early on and clearly that this form should not be used if the house was not a personal residence after death.

And another odd thing to me is why they have questions to arrive at the basis of the inherited house if money was spent for the estate to acquire the house.  Not sure what costs there would be for that.  We had costs to sell ours, but not inherit it.

[diycpa]

Please help me! It does not allow me to enter our house selling costs if I try to show the house as an investment.  The only way I can enter the selling expenses is to use your Home Sale Worksheet, which takes me back to the initial problem, that I cannot put in the word INHERITED!

Hours of wasted time still happening here.  What is the solution?

[diycpa]

IF I could just be allowed to type the word INHERITED in for Date Acquired on the 8949, I would be done!  The IRS requires the word, so why can't TTax allow me to type it in?

[tagteam]

I suspect you will have to do an override to insert the word on Form 8949.

Doing so, however, will obviate the ability to e-file; you will have to print and mail your return.