short-term gain reported by TurboTax on sale inherited home

[bhowe]

I'm a little confused and think I may be doing something wrong in Turbo Tax Business. My mother passed in 2018 and I sold her house in 2019. The FMV of the house was $240,000. With sale price of $222,000 and other expenses it shows as a loss on the estate tax form. BUT, the K1 form I have to file shows a short term gain of $201,000. Do I have something entered wrong somewhere? Where should I look? I can't believe I should have to pay any taxes on my personal taxes based on the sale of this inherited prorperty. 

[Anonymous_]

Did you enter the transaction in the Investment Income section under Home Sales?

You must have missed a step in the process. Ensure that your figures are correct and you indicate the house was not being used for personal purposes.

[bhowe]

I assume there is a free ride Tax wise with an inheritance that is this small? Where does that come in?

[Anonymous_]

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@bhowe wrote:

I assume there is a free ride Tax wise with an inheritance that is this small? Where does that come in?

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An inheritance, aside from certain assets such as retirement accounts (e.g., IRAs), is generally not taxable to the beneficiaries. 

It also appears as if you have a loss on the sale of the house which can be passed through to the beneficiaries (assuming the property was held as investment property).

See https://www.irs.gov/publications/p559#en_US_2019_publink100099687

[bhowe]

Do I claim the house as an investment? It was inherited in 5/2018 and sold in 2/2019. I didn't think of it as an investment. Maybe that's where I went wrong with the TT

[Anonymous_]

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@bhowe wrote:

Do I claim the house as an investment? It was inherited in 5/2018 and sold in 2/2019. I didn't think of it as an investment. Maybe that's where I went wrong with the TT

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Was it ever used for personal purposes after death (i.e., did a friend or family member use it as a residence)? If so, it was not held for investment purposes.