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Form 1041 - 2017

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    Form 1041 - 2017

    I need to determine where to record in the form 1041 the monies received by the estate in 2017 for a payment by the county in N.C. for eminent domain?

    Thank you!

    #2
    Unless the treatment on a 1041 is different for conversion of property, it would be Sch D or 4797 if the property was used in business. I am assuming the property taken by Eminent Domain had some basis?
    Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDR

    Comment


      #3
      Sae of a Home from an Estate

      Originally posted by ATSMAN View Post
      Unless the treatment on a 1041 is different for conversion of property, it would be Sch D or 4797 if the property was used in business. I am assuming the property taken by Eminent Domain had some basis?
      I have additional information. The decedent passed away in March, 2014; it was his primary residence. Home was sold in June, 2017. In my research I have found that the basis is stepped up on inherited property at the fair market value at the death of the decendent. Second, I also found that the exclusion ($250,000-single status) can only apply in this case if the home was sold in the year of death.

      I would appreciate any help on this as I continue to research it from IRS pubs and other sources. Is what I have stated above correct?

      Thanks very much!

      Comment


        #4
        Yes, the property is 'stepped up' to the Fair Market Value on the Date of Death.


        I don't think the 121 exclusion ($250,000) applies to a single person at all when the property is 'stepped up' (during the brief period when properties were not going to be given a 'step up', they added the ability to use the exclusion, but then that was removed when the properties continued to receive the 'step up').

        At any rate, you are past the 2-out-of-5 years anyways, so there is no exclusion (the rules vary a bit if the taxpayer was married and if the living spouse continued to use the home).


        As ATSMAN pointed out, you just report it as a sale of the home, using the 'stepped up' basis. If a person was living, there could be additional things involved if the taxpayer were to replace the property, but I'm assuming the Estate is not going to replace the property.

        Comment


          #5
          Form 1041 - Sale of Home

          Thank you for the information on this transaction! I will record the sale of the home as you described and noting the Section 121 exclusion does not apply in this case because of the step up in basis.

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