Gain on house sold in Estate

[AZ-Tax]

Single TP (decedent) purchased house April 2014 while living, decedent passed in May 2014 parents inherited house by court since no will, house sold Oct 2014 at net gain. Am I correct that the ownership and holding period is not enough to qualify for the $250K exclusion from the gain? Sale is to be reported on 1041 due to property was included in decedents estate, correct? HUD names "parents name as PR of the Estate of decedent" as seller. Can it be reported on Sch D?

Parents also inherited by court, stocks but have not sold them are these reportable on form 1041?

[Burke]

Given your set of facts, decedent died May, 2014 and house sold Oct, 2014. Basis is FMV at date of death. It may have sold for more than that 5 mos later, but after you deduct all the expenses, realtor fees, closing costs, etc. etc., was there really a gain? $250 exclusion has nothing to do with it. It is a capital asset of the estate and reported on 1041. You use Schedule D-1041. It is different from a regular Schedule D. If there is a loss, it will pass through to the beneficiaries which in this case sound like the parents. You said parents inherited stocks "by court." If their names were not on the stocks, the stocks are also part of the Estate and if sold, go on the 1041. If they are not sold, they are simply transferred into the parents' names through the broker and they can sell them whenever they please later.

[AZ-Tax]

Cost basis will be FMV at DOD etc.

Given your set of facts, decedent died May, 2014 and house sold Oct, 2014. Basis is FMV at date of death. It may have sold for more than that 5 mos later, but after you deduct all the expenses, realtor fees, closing costs, etc. etc., was there really a gain? .

Cost basis will be FMV at DOD and NOT cost basis at purchase, correct? After DOD, Parents needed to make repairs which would be added to FMV along with utilities and other exps to get house in condition to sell then subtract sellers closing cost, realtor fees etc. to determine cost basis. Parent did not live in house. Sound correct?