[Jonmacmom]

My husband inherited a house upon the death of his father. We sold it within 3 months. It was paid for, we made no improvements, and we sold it for the same price he paid for it 5 years ago, which is less than the assessed value on the tax statement. Do we still list it as capital gains? I'm trying to figure out where I list this on Turbo Tax. I don't see a place to imput the 1099-S. Can we also claim attorney fees that we paid to have the house put in my husband's name and for closing costs? :confused:

[ebaines]

You report the house sale on Schedule D as a capital gain or loss. Your cost basis is the fair market value of the property as of the data of death of your father in law. The amount realized is the sales price minus your costs of sale, which typically include things like commissions and legal fees in suport of the sale.

See Pub 523 for information on how to report the sale:
http://www.irs.gov/pub/irs-pdf/p523.pdf

[ScottGem]

Assessed value on the tax statement is not necessarily representative of true value.

Since the death was within three months, you should have no problem getting a realistic appraisal to determine your cost basis.