I am sorry about your loss of your father.
You need attorney and CPA to help you with the deal. Don't do this on your own.
For your bot***** *****ne question. Yes, you are selling it as a loss for 200,000 from the sales price and the basis.
However, for your accountant and attorney, please share the considerations below with them.
1) The business value could have been valued too high. The IRS and state tax authorities can challenge this business valuation. The owner's passing needs to be calculated in and adjusted. A personal service company without the sole service provider can reduce its value significantly. For example, if this company is held as it is just for three months. Its value could become 0.
Therefore, the 400,000 purchase price could be the market price.
We are not selling real estate or stocks for which the market prices can be much easier appraised.
2) Make sure your mother's name is ***** ***** the share of owners.
3) Make sure all the assets and liabilities are calculated and accounted for, especially the liabilities.
I saw your second posting which is significantly different than where we are going with the first posting.
I would like to offer premium service for us to have more Q&A or even phone time. It is apparently a professional conversation. We would like to cover all aspects well.
Fiona Chen, MPA, Ph.D., CPA, ABV, CFF, CITP