Ask a CPA

No. Losses are not allowed on sales between family members. Family members include sisters, brothers, parents, grandparents, children or grandchildren.

For Section 1244 losses, a taxpayer can claim an annual maximum of $50,000, if single, or $100,000 for a married couple. Any loss over this amount is a capital loss.

The amount of the annual rollover gain to an SSBIC is limited to $50,000 (25,000 if filing MFS).

You will receive a Form 1099-B or 1099-S which states the gross proceeds from the sale of capital assets. The IRS will also receive a copy of Form 1099-B or 1099-S. Make sure the detail transactions listed on IRS Schedule D in the sales column equal the gross proceeds amount listed on Form 1099-B.

The sale of inherited property is reportable as a sale of a long-term asset reportable on IRS Schedule D.

Gain on sales of year-end publically traded securities must be reported in the current year even though you will receive payment in the following year.

Selling expenses should be added to the cost amount and subtracted from the gross proceeds sales amount on IRS Schedule D. This will help insure that the gross proceeds figure agrees with the 1099 slip that the IRS will receive.

In addition to the cash proceeds, you should include the unpaid balance of the mortgage as part of the sales price received on IRS Schedule D.

For a residence, the additional costs you incurred are not deductible in the current year. They will be added to your basis for use in the calculation of gain or loss upon disposition. Examples of additional costs are lawyer fees, commissions, survey costs, title insurance, and recording fees. Any mortgage interest and or real estate taxes are deductible in the current year.

Generally your basis of inherited property is the fair market value of the property on the date of the decedent's death.
Speak to your local CPA about the exceptions that would determine when the fair market value should not be used.