Yes, the sale could be taxable. It will depend on how you have used the home since you inherited it and whether you sell it for more than it was worth in 2014. If you have lived in the home as your main residence for at least 2 of the previous 5 years then you may be able to exclude the gain on the sale of the home. If this is the case, when you enter the sale in TurboTax make sure you enter it as the Sale of your Main Residence. The program will help you understand if you meet the criteria to exclude the gain on the sale. If you rented out the home or otherwise cannot claim the home as your main residence for 2 of the previous 5 years, then the gain from the sale will be taxable. The good news is that you can use the value of the home when you inherited it as your cost (basis) in the home. You can also include any improvements you have made to the home in your costs. In this case you will want to enter the sale in TurboTax under the Investment section as a Sale of a Second Home. In either case, if you sold the home at a loss, the loss is not tax deductible.
... View more