IRS Form 8949 completion for 2022 tax return

Lainey

Live in Maryland and my family sold inherited piece of land in South Carolina. I was one of 31 heirs and received $5456 from land sale. Total appraisal for land was $405,460 and land sold for $371,065. I am unclear about completing IRS tax forms 8949 and capital gains schedule D if needed. What are my options online with guidance from Freetax in doing tax return?

Lainey

LukeW

Hello, Lainey! Great question.

Generally, cash received as part of an inheritance is not taxable to the recipient. If that's all that happened, you likely don't need to report that in your taxes.

If you are a beneficiary of income from an Estate, you should be sent a Schedule K-1 from the Estate reporting your share of the income. You can then enter that K-1's information into your 2022 FreeTaxUSA account under the "Income" tab → "Uncommon Income" → "Estate and Trust Income (Schedule K-1)", and shouldn't need to worry about anything else.

If you inherited the land and sold the land, that would be reported in the "Income" tab → "Stocks or Investments Sold (1099-B)" as "Other". Here you would need to report dates acquired, proceeds, basis, etc. After all of the sale information has been entered into your account, FreeTaxUSA will generate a Schedule D and a Form 8849 for you.

If you need further help, you can always click on the "Support" button in your account and send a message to Customer Support, we're always happy to help!

Hope that clears things up a bit,
Luke
Customer Support