Who reports the sale when several heirs inherit one property?

Each owner generally reports their share, unless the estate or trust sells the property before distribution. For inherited property that is sold, taxable gain or loss is generally calculated from the sale proceeds and the inherited tax basis, adjusted for allowable costs and improvements. Ownership, basis, timing, beneficiary status, and whether the amount is principal or income can all change the tax result. Keep the underlying source records together, then have a CPA, enrolled agent, or tax attorney reconcile the documents with the taxpayer, form, basis, and filing deadline.