1041 sale of home

[pmg628]

Executrix sold her Dads home to pay off a State lien and final expenses. Is this sale reported on a 1041?? He had no other income, he died in 2010 and the home sold 2013, it was his main home for 50 years

[DonB]

Yes, report on a 1041. But you should get an appraisal of the FMV on dad's date of death to be used as basis. Gain or loss goes to beneficiaries via K-1. Selling expenses may generate a loss.

[Burke]

They will probably have a capital loss on the sale of the home, and another deduction for administrative expenses in excess of income from what it sounds like. You don't say what the state lien was for, but if it was for taxes that would be deductible. If it was for Medicaid recovery, that's different.

[ChEAr$]

They will probably have a capital loss on the sale of the home, and another deduction for administrative expenses in excess of income from what it sounds like. You don't say what the state lien was for, but if it was for taxes that would be deductible. If it was for Medicaid recovery, that's different.

Except for the fact there are three years between inheritance and sale of property, so any settlement expenses might not outweigh any gain.

[Burke]

Maybe, but home prices aren't going up that much even though the economy is getting better. Sometimes it takes 3 years to sell the home, because the market just isn't there for the price they are asking. I have many clients whose parents lived in the house for ages, and nothing was done to it in the later years due to ill health and old age. 50 years in one place probably means a lot of upgrades were needed to make it saleable.