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New Member
posted Mar 4, 2024 11:44:56 AM

What if I failed to report carrying costs on inherited property until its sale?

My siblings and I inherited my father's house at his death in 2021. We sold it in January 2023. How can we report the carrying costs for 2021 and 2022?

 

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6 Replies
Level 15
Mar 4, 2024 11:49:01 AM

Property tax and mortgage interest deductions must be reported in the tax year they were paid. 

New Member
Mar 4, 2024 11:58:52 AM

Thanks. What about things like maintenance? Gas and electric? Alarm systems. Watering and gardening, etc.

New Member
Mar 4, 2024 11:59:46 AM

Does this mean I cannot file an amendment to my taxes for 2021 and 2022 to deduct these?

Level 15
Mar 4, 2024 5:01:05 PM

Did you rent the home during that time?

Level 15
Mar 4, 2024 5:45:29 PM

cost of utilities, maintenance, lawn mowing etc is not deductible.

 

@CLGPWK 

Employee Tax Expert
Mar 4, 2024 8:51:48 PM

It depends.

 

If the inherited property was rented out, you would need to amend your 2021 and 2022 tax returns and claim these expenses on Schedule E as part of your rental real estate activity.  If it was rented out, you would also be able to include the cost of utilities, maintenance, and lawn mowing.  

 

If the inherited property was just held and not rented, you would only be able to deduct the mortgage interest and property taxes (up to a maximum of $10,000 overall for taxes) if you were able to itemize your deductions on your tax return.  If you took the standard deduction and adding in these additional expenses still result in an amount that is lower than the itemized deduction total, there would be no change to your overall tax return.

 

If you determine you are entitled to these deductions, you can follow the instructions on this link to amend your tax return.

@CLGPWK