Inherited Home
Usually, you enter the sale of an inherited home on the Stock or Investment Sale Information screen.
Menu Path: Income > Common Income > Investments and Savings (1099-INT/DIV/B/DA)
However, if you moved into the home as your personal residence and then later sold the home, the home is not treated as an investment. Most personal residences sold do not need to be reported on your tax return. Go to the Sale of Main Home screen for more details on the sale of your personal residence.
Menu Path: Income > Uncommon Income > Sale of Main Home
If you turned the inherited home into a rental property, then when you sell the home, treat it as a rental property sold. Rental home information, including the sale of a rental home, is entered on the Rental Income screen.
Menu Path: Income > Business / Rental Income > Rental Income (Schedule E)
If you inherit a home, your cost basis in the home will usually be the fair market value of the home on the date of death. For example, if you inherit a home from your grandfather that is worth $100,000 on the date your grandfather passed away, then your cost basis is $100,000, even if your grandfather originally purchased the home 20 years ago for $30,000. If you sell the home 8 months later for $95,000 then you would report a $5,000 loss on your tax return for the sale.
In very rare scenarios, an executor of an estate may elect to do an alternate valuation 6 months after the date of death to reduce estate taxes. In that scenario, the cost basis is the alternate valuation instead of the fair market value at the date of death.
Menu Path: Income > Common Income > Investments and Savings (1099-INT/DIV/B/DA)
However, if you moved into the home as your personal residence and then later sold the home, the home is not treated as an investment. Most personal residences sold do not need to be reported on your tax return. Go to the Sale of Main Home screen for more details on the sale of your personal residence.
Menu Path: Income > Uncommon Income > Sale of Main Home
If you turned the inherited home into a rental property, then when you sell the home, treat it as a rental property sold. Rental home information, including the sale of a rental home, is entered on the Rental Income screen.
Menu Path: Income > Business / Rental Income > Rental Income (Schedule E)
If you inherit a home, your cost basis in the home will usually be the fair market value of the home on the date of death. For example, if you inherit a home from your grandfather that is worth $100,000 on the date your grandfather passed away, then your cost basis is $100,000, even if your grandfather originally purchased the home 20 years ago for $30,000. If you sell the home 8 months later for $95,000 then you would report a $5,000 loss on your tax return for the sale.
In very rare scenarios, an executor of an estate may elect to do an alternate valuation 6 months after the date of death to reduce estate taxes. In that scenario, the cost basis is the alternate valuation instead of the fair market value at the date of death.
