Home got sold through estate at a loss - how do you report sale and on what form?

[cipparulo12345]

Home of deceased got sold by daughter - there are 3 beneficiaries including her.
The sale of the Home was by the Estate of Josephine """
Does the sale of the home go on the 1041 or the 1040 of the beneficiaries? Does the estate get the stepped up basis?
There will be a loss if they get stepped up basis which will be non-deductible.

[cipparulo12345]

Also there were savings bonds the estate cashed in and the 1099 was made out to the estate I.D. Number. Should I just have the estate pay the tax and not issue a K-1 because the 3 beneficiareis already filed and are now upset.

[Burke]

What was date of death? When was home sold? How was loss calculated? If sold soon after death, only loss would be due to expenses, i.e, real estate commission, deed prep, etc. Sale of home goes on the Sche D-1041 of estate return to be divided between beneficiaries, long-term capital loss. Re: savings bonds, see prior post answer.

[cipparulo12345]

Date of Death was 4-16-19. Home was sold 6-22-20. Loss was calculated. Sell Price $365,000 less $21,400 Selling Commission. Basis is $415,000 which was the FMV at date of death and it was appraised.
Goes on Schedule D, yes. Does estate get stepped up basis?

[cipparulo12345]

Long - Term capital loss? But it was a personal residence?

[ttbtaxes]

In general, not many homes around the country declined in value during a 14-month period from mid-2019 to mid-2020. Inventory is low and home were being snapped up once they were listed. I would make sure the appraisal is defensible.

[cipparulo12345]

Nevermind, I understand everything now. The estate gets stepped up basis and it is a capital asset even though it was a personal residence. Loss is limited to selling expenses because FMV is really the selling price. The loss gets passed to the 3 beneficiaries on K-1 and are limited to $3,000 capital loss limitation per year.

[Lion]

Was it sold to an unrelated party in an arms-length transaction?

[TAXNJ]

Nevermind, I understand everything now. The estate gets stepped up basis and it is a capital asset even though it was a personal residence. Loss is limited to selling expenses because FMV is really the selling price. The loss gets passed to the 3 beneficiaries on K-1 and are limited to $3,000 capital loss limitation per year.

See TTB starting T 21-6 for helpful information


3-15-21POST

Home of deceased got sold by daughter - there are 3 beneficiaries including her.

The sale of the Home was by the Estate of Josephine """

Does the sale of the home go on the 1041 or the 1040 of the beneficiaries? Does the estate get the stepped up basis?

There will be a loss if they get stepped up basis which will be non-deductible.

Also there were savings bonds the estate cashed in and the 1099 was made out to the estate I.D. Number. Should I just have the estate pay the tax and not issue a K-1 because the 3 beneficiareis already filed and are now upset.

3-14-21 POST

Does normal bequests or inheritances go on 1041. I think not. I see line 10 on Schedule B called Other Amounts Paid, Credited or Otherwise Required to be Distributed.

I assume they mean something else and not normal inheritance monies from Checking, Savings, etc. Thanks for your input.

[cipparulo12345]

yes, it was really only worth $365,000. It was built in 1947 and sort of outdated. The FMV should not be $415,000 as you said..