sale of inherited house 1099-S

[teddyhuang]

I received a 1099-S for sale of an inherited house in 2024. It sold for less than the fair market value appraisal, so minus sales and improvement expenses, it's has capital losses. I read that this information needs to be inputted in the Investments section. However, if I select "sale of 2nd home", at the end, it says, "not eligible for exclusion" so I selected "other" as the type of investment. Is this correct?

Also, there only seems to be a place in Turbotax to input sales expenses and NOT improvements made. Should I just add the improvementts to the sales expenses section? Thanks.

[MayaD]

If you selected "Second home," "Land (personal use)," or "Personal items" the loss is not deductible.

In TurboTax you would  report it as investment sale.

1. Since you did not receive a 1099-B, answer “no” to the 1099-B question or select skip Import 
2. Select Other for What type of investment did you sell?
3. Select I inherited for How did you receive this investment? 

The basis of property inherited from a decedent is generally one of the following:

• The fair market value (FMV) of the property on the date of the decedent's death (whether or not the executor of the estate files an estate tax return (Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return)).
• The FMV of the property on the alternate valuation date, but only if the executor of the estate files an estate tax return (Form 706) and elects to use the alternate valuation on that return. See the Instructions for Form 706.

 Sales expenses include:

• commissions
• appraisal fees
• broker's fees
• legal fees
• advertising fees
• home inspection reports
• title insurance
• transfer taxes or fees
• geological surveys
• loan charges (points) or other fees paid on the buyer's behalf
• any fees for a service that helped you sell your home without a broker (listing fees, promotional fliers, etc.)

 You can add the improvements to the cost basis of the property.