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R. Klein, EA
R. Klein, EA, Enrolled Agent
Category: Tax
Satisfied Customers: 3375
Experience:  Over 20 Years experience
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I am the administer/executor of my fathers (deceased) estate.

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I am the administer/executor of my father's (deceased) estate. We sold a property last year whereby there were 4 persons who were to receive money from the sale. Also, 1 other person had monies owed to them. The breakdown of the settlement was : Myself (3/6), & 3 relatives (1/6 each) - 'after' all owed money was paid. The total amount of money from sale was listed on MY Social Security/ Tax Number. My Question, since I did not receive total amount of sale, is How do I file & what form(s) will I need ? Will I need to show how the money was dispersed ? etc., etc. Thank You. Greg

Randalltax :

Thank you for contacting me about your Tax issue. I will work hard to help you understand the issue clearly.

Randalltax :

The first question that needs to be answered is "WHO sold the property"?

Randalltax :

Did the ESTATE sell it? Or was the property transferred to you and YOU sold it?

Randalltax :

Typically, you will find this on the HUD-1 closing statement, among other places.

Customer:

To the best of my knowledge, the estate sold the property.

Randalltax :

OK, then the sale of the property MUST be reported on the Estate's tax return. The estate will be responsible for any capital gain tax, although if the property was sold soon after death of your father, there likely will be no taxable gain. This is because the property had a "step-up" in value on the date of your father's death.

Randalltax :

On your tax return, just to make sure Uncle Sam doesn't come filling your mailbox with letters, you can report the entire sale as reported on the 1099S, and put down the SAME amount as the cost basis so that it zeroes out on your return. This will be reported on Sch D.

Randalltax :

The distribution of the cash from the sale is up to you as executor.

Randalltax :

Income is reported on Form 1041. Allocations of the gain (if any) are reported to each beneficiary on Form K-1. Distributions are not on the forms

Customer:

We actually took a loss on the property value because of the condition. Certain areas (roof & sub-floor) were not up to today's codes. Property was sold - 'as-is' . Additionally, I am un-employed & don't file a personal tax return. What is the form # XXXXX I will need to use for the Estate ? Can I file this form(s) or will I need to use Tax Consultant ?

Randalltax :

The value of the property at sale is not related to its market value "if fixed up". The cost is the value of the property when father died. If it was in beat up condition then and you sold it soon afterward, the property likely did not lose much, if any value.

Randalltax :

The only way you took a "loss" is if the property or the market deteriorated between the time of death and the sale.

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