sold a house in PR

[gerdora]

My wife and I are filing jointly our US federal income tax for tax year 2025. My wife inherited, along with her brother, her mother's house in Puerto Rico where they split the sale 50-50. She will file married filing jointly in PR as a non-resident. PR retained, at the time of sale, 15% of her half of the sale. Could someone give complete step by step where in Turbo Tax Premier desktop tax year 2025 do I enter this?

[MarilynG1]

To report the sale of an inherited home, you need to know the Cost Basis of the home (FMV at time of grantor's death).  You will enter that amount, with the Proceeds that you received, and any Costs associated with the sale, to determine any taxable Capital Gain.

In the Income section, go to Investments > Stocks, Crypto, Mutual Funds, Bonds, Other > Add Investments > Skip Import.  On the next page, choose the 'Other' tile.  Choose 'second home' for item sold, and 'Inherited'.  Enter any Sales Expenses. 

Here's more info on how to report the Sale of Inherited Home and Calculating Your Home's Basis.

@gerdora 

[gerdora]

Thank you! However, where do I enter the income tax that was withheld by PR at the time of the sale + the additional tax owed on the income from the sale of the house after filing in PR? There was no other income received in PR in 2025. There are steps for taxes in this “Investment” area but only for Federal & State. So, step by step please guide me where to account for the tax withheld tax and tax owed (on the income from the house) after filing in PR.

[MarilynG1]

If you're reporting the income from the home sale in Puerto Rico on your US return, report the tax paid on the sale in the Foreign Tax Credit section under Deductions.  Continue through the questions about 1099 income, until you reach a screen that says 'do you have another type of foreign income/tax to report?'  

On the next screen, choose Passive Income and enter the amount of income that was taxed and amount of tax paid on that income.

Here's more info on Claiming the Foreign Tax Credit.

@gerdora