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