I Recently Sold a Vacant House. How Do I Enter That Property Tax Into H&R Block’s Software?

When you sell a house that’s been sitting vacant for a while, the rules for reporting the property taxes from the sale are a little different than a normal home sale. We can help answer your questions about how to handle the property taxes with H&R Block software.

First, you first need to determine how the property was used. All property falls into one of four use types:

  • Personal use
  • Business use
  • Stock-in-trade (inventory)
  • Investment use

Since the house has been sitting vacant and waiting to appreciate, the investment use property type will apply to you.

When you sell an investment property, you’ll report it as a Sale of Collectibles and Other Investment Property in the property tax interview portion of our software. Once you enter the sale, it’ll appear on Form 8949, which we’ll then enter on Schedule D.

Entering Estate Tax in Our Software

Since this isn’t a sale of securities, you won’t receive a Form 1099-B. Follow these instructions when you enter this information into our property tax interview part of our software:

  • Date acquired: The date you took ownership of the inherited property. Enter “Inherit” here.
  • Cost or other basis: For inherited property, this is usually the fair market value (FMV) at the date of death. If you didn’t get a property appraisal at the date of death, you’ll need to get one now. Most appraisers will be able to give you a retroactive appraisal of the home. You can’t use a property tax statement from that time, since assessed values for property taxes rarely match their FMV. If you made any improvements to the home after you inherited it (like a remodeled kitchen or new roof), you’ll need to add those costs to the basis.
  • Date sold: This is the date that escrow closed and the new owner took possession.
  • Sales price: Enter the selling price minus any sales expenses. The usual selling expense is the broker’s commission, but you can also deduct advertising fees, legal fees, and any points you paid for the buyer.

Once you’ve entered this information, we’ll calculate your gain or loss (the sales price minus basis). Since this is an investment property, you’ll be able to deduct a loss if there is one. However, you can’t exclude a gain from your income as you can with your main home.

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