Sold inherited land for less than appraised value. How do I show this loss?

[wally1985-]

share of inheritance 1/3
appraised at $345,000
sold for $315,000

[SusanH]

Because an inherited property is treated as an investment property, you are entitled to claim a loss on this. You would report 1/3 of the sales price & expenses and 1/3 of the cost basis, the amount of the appraisal.

To get started on the sale of the home

• Federal Taxes (Personal if using Home & Business)
• Wages & Income (Personal Income if using Home & Business
• I'll choose what I work on
• Scroll down to Investment Income (even though the house was inherited)
• Click Start/Update across from Stocks, Mutual Funds, Bonds, Other
• 3-4 screens in you'll see "Choose the type of investment you sold"
• Select "Everything Else"
• Enter the address, net proceeds (1/3)  and date of sale (continue)
• The 'net proceeds' is after reducing your sales proceeds by 1/3 of any expenses
• At "Tell Us How You Acquired This Home", select inheritance
• Enter the date you inherited the house and on the next screen
• Enter 1/3 the appraised value 
• You can add to the appraised value 1/3 of any costs to carry the property (ex. taxes) or improve/repair/clean up the property prior to sale.
• State that you used the property as an investment