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I'm the executor of my dad's estate. We are selling the the property this week. What do I use as the basis for the sale of the property? The acessed value or the list price on the property? As well what forms do I need to use, and when do I file? I will not be receiving the Intrest statements until January of next year? Thanks
Country/State/Province of question: usa, georgia Already Tried: Estate is located in NJ I have tried lookin on IRS forms 1041, it shows if you are selling stock to use a sch d, but it does not mention the sale of a house.
Hello Hollow, When you receive property through an inheritance, you are entitled to a full stepped up basis in the property, meaning your basis will be whatever the fair market value was of the property on the day you inherited it. When you sell the property, if you sell it for more than your basis, you have a taxable gain. That gain, if any, is reported on Schedule D as a long term capital gain, the same as if you had sold stocks. Normally if you sell a property within a short period of time after receiving the inheritance, you will not have a gain or will have a very small gain, as your selling price will likely be the same or at least very close to your stepped up basis. But if you do have a gain it is reported on Schedule D in Part II as a long term capital gain and would be subject to a maximum tax rate of 15%. If this was helpful please press the Accept button. Positive feedback is also appreciated. Thank you Hollow.
do I use the sch d 1041 form or does this go on my personal 1040 sch d at the end of the year?
Hello Hollow, If the estate has not yet been settled and the house is being sold while still an estate asset, then you will report any gain on Schedule D of the Form 1041. If the estate has been settled and title of the home has already passed to you, then any gain will be reported on your personal return. If this was helpful please press the Accept button. Positive feedback is also appreciated. Thank you Hollow
Sorry more information! The FMV of the house was 299K at Date of death we are selling it for 255K so the 44K loss can the heirs take that loss off their personal tax return or only off the Estate 1041 return?
Hello again Hollow, The same rules would apply to a loss as they would a gain. If the house was sold while it was still part of the estate's assets, then the loss is reported as a loss on the Form 1041 Schedule D. It cannot be reported as a loss on the personal return of the heirs unless the property has already been transferred to their names. If this was helpful please press the Accept button. Thank you Hollow.
Accountant
25+ years tax consulting. Specializing in returns for US citizens living abroad