I sold home parents left me, (deceased 2-05) $129,000.00, closing cost $12,493.00... I had to do lot of repairs $41,000.00 & paid property taxes prior to sale
How do I do this.. I know long term gain
Does the taxes I paid.. plus closing cost (around 15K) go on schedule A
I know its last minute but I thought I could figure it out
Help Me Please,
Juanita:confused:

If you treated the house as your second home (i.e. you didn't rent it out, and don't have another second home) you can deduct property taxes you paid on schedule A.

If the repairs you did were for upgrades of the house they may raise the cost basis of the property. You don't deduct these costs, but rather use them to raise the cost basis, which in turn lowers the capital gains you might otherwise owe when you sell the house. Please read Pub 530: http://www.irs.gov/pub/irs-pdf/p530.pdf - on page 10 it describes which types of repairs you can use to add to the cost basis. The original cost basis of the house is its fair market value on the date of death of your parent in 2005. You add other cost items items such as qualified repairs to determine the adjusted cost basis. Closing costs are considered to reduce the amount you receive when you sell, which again reduces the capital gains owed, but otherwise they are not deductible. See Pub 523 for information on the sale of the house and how to treat closing costs: Publication 523 (2007), Selling Your Home

1. Any property you inherit is long term. So it is long term gain.

2. Your basis of the property is the Fair Market Value of the property on the date of death plus additions did by you. Repairs are not additions so you can not add repair cost in your basis.
Read: Your U.S. Tax Return: Tax on Inheritances

3. Report sale on schedule D.

4. If you lived in the house as your Main house for two years, then you may be able to exclude profit up to $250,000.
Read: Your U.S. Tax Return: Profit From the Sale of Your Home