Monies received from sale of property from a trust - tax implications

You would report this as a sale of an investment. Before you begin though, you will need to know the Fair Market Value (FMV) of the house at date of death of the decedent. Once you have this amount, you would divide this amount by 4 to determine your share of the cost basis of the house. Now to report:

1. Log into or open your Turbo Tax Program
2. Once you are in your tax return, click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
3. Next click on “Wages & Income” ("Personal Income" in TurboTax Home & Business)
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 –  This is the amount of income you received from the sale.
   3. Date Sold – Date of the sale of the house.
10. Tell us how you acquired the property - inheritance
11. Enter the date inherited.  This is the date of death of the decedent.
12. Enter the your fair market value - Fair Market Value of the property at the time of death plus any capital improvements since inheriting it. (Also, you can increase the basis (FMV) by the allowable closing costs)
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.

@rrblac 

Did you receive a K-1? Who paid you your share of the proceeds (e.g., a trustee of the trust)?

You need to inquire as to nature of the trust and also whether or not the trust will issue a K-1 to you and, further, whether or not, the trust paid any income tax due on the sale of the property.