Sale of House of Dead Mother

[VondenHogenBeaverHausen]

Facts:

Mother died and she owned her house. The estate passed through a k1 capital gain of 28,000. Does this sound wrong? There is no way the house went up 28,000 from her date of death. Do we have any 1041 experts out there?

I don't think there should be much of a gain on this at all.

Your thoughts please.

Thanks.

[veritas]

What was the time between valuation and date of sale?

And what the heck does your name mean?

[Gretel]

If it was only a short time between death and sale of house, plus selling expenses, you should rather have a loss than a gain.

[jainen]

Appraisals

>>There is no way the house went up 28,000 from her date of death.<<

Appraisals are based on comparable sales over the previous several months. In many communities last year it was not unusual to get offers higher than asking price. A house worth $600,000 could easily jump 5% when it is put on the market.

[Harvey Lucas]

Gain sounds wrong

An apraisal is someones educated guess regarding what a property is worth using many diferent methods...the the truest indicator of FMV is what it actually sold for, assuming willing buyer, willing seller, non-related parties.

If the home sold a short time after death, the fmv/basis is the same as sales price. However, since you can add sales cost to basis, ie real estate commissions and the like, you usually end up with a loss on the sale...

However.....maybe there was an estate tax issue...possibly the total estate was up there close to the point that estate taxes could be an issue...if this were the case, they may have placed a lower value on the property to avoid estate tax....if they did...then they had to be consistent and use the same stated value for a later sale....it would be up to IRS auditors to decide if the stated value used to calculate estate tax was correct or not..

contact the estate administrator and ask them how and why they valued the property 28,000 less than what it actually sold for.

HarveyLucas