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Sale of inherited home.

Forum|Forum|6 years ago
March 14, 2020
17 replies
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Client inherited home from father. The basis at the time of death was $14,000. Client remodeled home at a total cost of $45,000. They sold the house for $58,000. I am assuming this just gets put on Schedule D with a 1,000 loss correct? Then I see they were issued a 1099S form, so do I need to enter the 1099S sale of home worksheet and if so, how do I exclude the income since it was not a main home?

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Best answer by IRonMaN

But you can deduct the loss if the home wasn't used personally by the family between the date of death and date of sale. It's basically investment property if it isn't used personally. Don't forget to take any closing costs into consideration when calculating the loss.

T

Terry53029

Intuit Community Champion

your client would have a basis of FMV at time of his father passing, plus improvements.

If he has a gain you report the gain on schedule D. If a loss, cannot take a loss

C

CRM2182Author

Level 5

It was never used as a personal residence for the client. Does the 1099S form still need to be filled out?

IRonMaN

Level 15

You can just proceed to schedule D.

Slava Ukraini!

IRonMaNAnswer

Level 15

But you can deduct the loss if the home wasn't used personally by the family between the date of death and date of sale. It's basically investment property if it isn't used personally. Don't forget to take any closing costs into consideration when calculating the loss.

Slava Ukraini!

L

LINDAAHILL

Level 3

I have received two very different answers to my question about a loss on inherited property that was never rented and never used as primary residence by the person who inherited it.

There will be a loss based on the appraisal of the property at the time it was inherited last year and the sales price.

Since it was not investment property, I assume that if there is a profit you report it but if there is a loss you cannot deduct it and you do not need o show it on your return.

Thank you for your help with this.

Linda

T

Terry53029

Intuit Community Champion

As Ironman said, if you inherited a home and never lived in or used personally, it is considered an investment property, and you report the gain or loss on schedule D.

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