Happy Memorial Day. Keeping in mind all the hot dogs and beer you're going to have (already had?) this weekend, we'll keep things simple. We'll deal with inherited property, Keogh contributions, spinoff stock and a beginner's mutual fund tax issue. Keep sending your questions, along with your full name, to
firstname.lastname@example.org . 1099-S -- Proceeds from Real Estate Transactions. The property was not my personal residence nor was it converted to a rental property. It was just held until sold. The property was appraised on the date of death and sold 11 months later at a loss. Can the loss be used to offset personal income? -- Jeanette Johnson Jeanette, When you inherit property, your basis -- or cost -- in the property becomes the fair market value of the property on the date of death, says Bill Fleming, director of personal financial services for PricewaterhouseCoopers. So if you sold the house on the same day you inherited it, there should be no gain or loss. But what often happens is you end up with an overall loss on the sale, thanks to broker fees and selling costs. "You're pretty much guaranteed to lose money on an inherited house," notes Fleming. Whether you can take that loss on your tax return depends on whether the house was a personal asset, investment asset or rental property. If you used the home at all, then most likely it would be considered a personal asset. This is the only situation in which you cannot take the loss on your tax return. Only gains on the sale of personal residences are reportable. If you rented the home out, it would be treated as a trade or business. So you could use losses -- and related costs -- to reduce your taxable income. Since you say that the home was not used personally or converted to rental property, then the inherited property can be considered an investment asset. You can report the loss on investment property on Schedule D -- Capital Gains and Losses. forewarn you about upcoming distributions, though. For more on the mutual fund basics, check out our How to Get Started at Mutual Fund Investing series by TSC Contributing Editor Brenda Buttner.