The house we sold was an inheritance to my husband and brother in law do we have to pay taxes on this? isa home equity line of credit to make improvements deductable

[DS30]

Regarding the sale of an inherited house-

It depends but if you have a capital gain on the sale, you will only have to pay any taxes on that portion of the sale that represents your proportional share of the capital gain portion (if you don't have capital losses to offset this capital gain).

No - If after you inherited the property, you used the property for personal use and had a capital loss then you will not report the loss.(The IRS does not allow a capital loss on the sale of personal use property. This rule applies to the sale of a inherited property that was a personal use property. The TurboTax system will enter a capital loss of zero for this transaction.)

Yes - If you have a capital gain on the sale or if no one used the home for personal use before the sale and you had a capital loss, you will report this sale on your individual income tax return.

You will each need to report your proportion share of the gain on your individual income tax returns as the sale of a capital asset.

Click this link for further information about reporting the sale of a capital asset

• To enter this transaction in TurboTax, log into your tax return  (for TurboTax Online sign-in, click Here  and click on "Take me to my return") and type "investment income (gains and losses)" in the search bar then select "jump to investment income (gains and losses)". TurboTax will guide you in entering this information (see step 6 below) 

Alternatively, To enter this transaction in TurboTax Online or Desktop, please follow these steps:

1. Once you are in your tax return, click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
2. Next click on “Wages & Income” ("Personal Income" in TurboTax Home & Business)
3. Next click on “I’ll choose what I work on” (jump to full list or show more income)
4. Scroll down the screen until to come to the section “Investment Income”
5. Choose “Stocks, Mutual Funds, Bonds, Other” and select “start’ (or “update” is you have already worked on this section)
6. The first screen will ask if you sold any investments during the current tax year (This includes any sale of real property held as an investment property so answer “yes” to this question)
7. Since you did not receive a 1099-B, answer “no” to the 1099-B question
8. Choose type of investment you sold - select everything else
9. Some basic information:
1. Description –  Usually the address of the property sold
2. Sales Proceeds – Your proportionate share of the net proceeds from the sale (your portion of 1099-S amount received for the property)
3. Date Sold – Date you sold the property (on 1099-S)
10. Tell us how you acquired the property - inheritance
11. Enter the date inherited
12. Enter the your fair market value - Your proportionate share of the Fair Market Value of the property at the time of inheritance plus any capital improvements since inheriting it 
13. If you had a loss, on the question of "Did you use this property for business or investment?" If the inherited house was not used for any personal use (no family member lived in it or used it between the time of inheritance and the sale), you will answer that this was for investment

Click IRS answers on Gifts and Inheritance for more information from the IRS on the sale of an inherited property.

Regarding your home equity loan interest expenses -

Yes, you may be able to claim interest as an itemized deduction if you financed this home improvement.

A qualifying loan is one that is taken out to add "capital improvements" to your home, meaning the improvement must increase your home's value, adapt it to new uses, or extend its life. Examples of capital improvements are: adding a third bedroom, adding a garage, installing insulation, landscaping and more.

Include this home improvement interest expense under the same section as you would Home Mortgage Interest.

To enter your Mortgage Interest in TurboTax Online or Desktop, please follow these steps:

1. Once you are in your tax return, click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
2. Next click on “Deductions and Credits”
3. Next click on "jump to full list" or “I’ll choose what I work on”
4. Scroll down the screen until to come to the section “Your Home”
5. Choose "show more", then Mortgage Interest, Refinancing and Insurance

[020816]

we inherited my wifes mothers home passed away in 2018.the house was sold in 2019.where do we report the sale if so where

[MaryM428]

The proceeds from the sale of the inherited home are taxable income.  When figuring the basis of the home, you normally use the value of the house on the day the descendent passed away.  That ais called a "stepped up value".   You will add the value of the home, plus any improvements you made before selling it, and any costs of the sale.

Here are the directions to enter the sale in TurboTax.