Inherited House

Yes, the fair market value on the date your mother passed, and any selling expenses or closing costs not included on Form 1099-S, should be allocated to all owners (split three ways).

Report this as the sale of an investment, since it was not a rental or business property.

In TurboTax (online or desktop) follow these steps after you open your return:

1. Federal Taxes.
2. Wages & Income.
3. Scroll to Investment Income.
4. Stocks, crypto, etc. >> Start/Update.
5. Add Investments (at the bottom).
6. Skip Import.
7. Type of investment would be "Other"
8. Enter a Description.
9. Type of investment: Second Home or Other.
10. Select I inherited it (important - it's always considered held long term which provides a special tax break)
11. Date of Sale.
12. Proceeds from Form 1099-S.
13. FMV on date of death (1/3 of total).
14. Enter sales expenses (your share) if not on 1099-S.

TurboTax will calculate the gain (if any). You won't report a loss.