sale of inherited house

[Linda-Sunshine]

Inherited a house then rented it out then sold it do I report as house or business asset sale?

[Jim-from-Ohio]

Schedule D

[Linda-Sunshine]

So are you saying it doesn't matter if I use home sale or disposition of asset as long as it ends up on Schedule D?

[sjrcpa]

At the time of sale was it a rental?

[Linda-Sunshine]

They allowed a relative to live in the house for a few months. He paid rent. Moved out in April when his house was built, but the inherited house wasn't sold until July.....they did not plan on having a rental and did not try to rent it after the relative moved out.

[Just-Lisa-Now-]

You cant use the HomeSale worksheet, that's for principal residence (Main Home) only.

[abctax55]

They allowed a relative to live in the house for a few months. He paid rent.

Was the rent at FMV?

[Camp1040]

Asset placed in service and removed in the same year, so no depreciation. Claim the rental income and sell it on schedule D as the others have said, with the step up in basis.

[Accountant-Man · Accepted solution]

No exclusion, but since the step up probably wiped out most or all of the gain, then NBD.