How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Lev Your Own Question
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29580
Experience:  Taxes, Immigration, Labor Relations
870116
Type Your Tax Question Here...
Lev is online now
A new question is answered every 9 seconds

If an estate owns the personal residence of the deceased party,

Customer Question

If an estate owns the personal residence of the deceased party, does the sale of the personal result in a tax gain or loss?
Submitted: 2 years ago.
Category: Tax
Expert:  Lev replied 2 years ago.
Hi and welcome to our site!
That is correct - the estate may realize either the gain or loss on the sale.
The issue is that when the property is inherited - it gets so-called stepped up basis equals to the fair market value (FMV) of the property at the time the decedent passed away.
So if the property sold shortly after that - most likely - there is no gain,
but if the property appreciated after the decedent passed away or there were substantial improvements - there might be a gain.
However - the most common situation - when the estate realizes a small loss.
For instance.
Assuming the FMV is $200k at the time the decedent passed away - and that is the basis.
So when the property sold shortly for the same $200k - and $10,000 were Realtor fees and other sale expenses - so in this example - the sale would result $10k capital loss.
If you still have any doubts, need clarification - please be sure to ask.
I am here to help you will all tax related issues.