turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

Q1-2021
Returning Member

Selling a house that was gifted to you

How to determine federal short term or long term capital gains with the following information: Parents own house in Montana. They had 3 sons. Father died in 2007 (value 165,000). Mother gave son #3 the house in 2023 (value 250,000).  Mother dies Feb 2025. Son#3 gifts sons #2 and #1 (30% each of the house). Son #3 retains 40%. House sells for 270,000 on Dec  31, 2025.  Basis from 2009-2023 is 30,000. (Mothers) Basis from 2023-2025 is 5,000.(Son #3 ownership). Closing cost 9,000. How is this all documented in the federal tax forms and what IRS form?

x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

7 Replies

Selling a house that was gifted to you

who owned the house just before father died and did they live in a community property state? The answer will vary based on the above

Q1-2021
Returning Member

Selling a house that was gifted to you

Mother and father

Q1-2021
Returning Member

Selling a house that was gifted to you

I am not sure if Montana is a community property state.

Q1-2021
Returning Member

Selling a house that was gifted to you

Montana is NOT a community property state

Q1-2021
Returning Member

Selling a house that was gifted to you

Montana is a not a community property state. Is there any thing else you need to help me with these issues?

Q1-2021
Returning Member

Selling a house that was gifted to you

I did not get an answer to my question.

ThomasM125
Expert Alumni

Selling a house that was gifted to you

I am not allowed to do calculations but the basis of a gift sold at a gain would be the doner's basis. In Montana the spouse would get a stepped up basis for the house when the Father died, so the original basis would be the $165,000. It would stay at that, adjusted for percentage of ownership, until sold as all you mention after the father died are gifts.

 

If the house was the primary residence of the decedents when sold, you would report the sale in the Wage and Income section of TurboTax and then Less Common Income, then Sale of home (gain or loss.) Otherwise, you would report it as an investment sale as follows:

 

You enter investment sales in the Wages and Income section of TurboTax, then Investment Income, then Stocks, cryptocurrency, Mutual Funds, Bonds, etc... Skip the section where it asks if you want to upload your tax documents. Choose Other for the type of property sold. When you come to the screen where you report the sales proceeds and cost basis, for the type of property sold, choose Land (personal use) or Land (other investment purposes), depending on whether there was personal use or not.


 

 

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

Unlock tailored help options in your account.

message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question