Inheirited home

[acme6942]

How do I report the sale of a mobile home I inheirited with my brother.   My mother passed in June 2022 and it was sold December 2022.   We agreed to split the sale 50-50 less the realtor commissions.  

Thank you.

[JamesG1]

You inherited the home in 2022 and sold the home in December 2022.  Generally, you inherit property at the fair market value on the date of death.

Report the sale on IRS form 8949 / Schedule D Capital Gains and Losses.

As an example, your mother may have purchased the unit for $40,000.  On the date of death, the unit may have been worth $50,000 and you sold the unit for $50,000.  Assume realtor commissions of $2,000.

Each of you would report the $25,000 sale, less $25,000 cost basis less $1,000 selling expenses equals long-term capital loss of $1,000.

Please follow these directions to enter the sale:

• Down the left side of the screen, click Federal.
• Down the left side of the screen, click Wages & Income.
• Scroll down to Investments and Savings.  Click Show more.
• Click Start/Revisit to the right of Stocks, mutual funds, bonds, other.
• At the screen Your investments and savings, click Add investments.
• At the screen Let's import your tax info, click Enter a different way.
• At the screen OK, let's start with one investment type, select Other.  Click Continue.
• Enter the sale information.

Per IRS Publication 551 (page 10), the basis of property inherited from a decedent is generally one of the following:

1. The fair market value (FMV) of the property at the date of the individual's death.
2. The fair market value (FMV) on the alternate valuation date if the personal representative for the estate chooses to use alternate valuation. 
3. The value under the special-use valuation method for real property used in farming or a closely held business if chosen for estate tax purposes. 
4. The decedent's adjusted basis in land to the extent of the value excluded from the decedent's taxable estate as a qualified conservation easement.

@acme6942 

[FilerBrian]

My condolences on the loss of your mother.  According to the internet, there would only be federal tax associated with the sale (capital gains) if the mobile home went up in value after you inherited it (unless mobile homes have shot up in price June to December, I'd guess the capital gain is zero -- if your residence was that mobile home when it was sold, I'd guess the home sale capital gains exemption applies, $250K, even more certain there are zero taxable gains).  If you and your brother both inherited half of everything, I (not a tax advisor, of course) would have to say the split would not be a tax event for anybody (just each pay half of the capital gains tax, again probably zero).  If officially you inherited it, the IRS may be curious about the half of the proceeds your brother received (considering his tax liability), he may want to consult a tax advisor and he may be interested to have a gift letter from you (this assumes the split isn't ultimately payment for work he did for you, interest you owed on a loan you got from him, etc).