Sold my late brother's condo after a complete remodel. (It was a real mess.) Can I take the expense of the interest and taxes paid until it was salable as any sort of deduction, or is it a loss? The home was NOT occupied, nor was it occupiable, until the sale.
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Never taxed to my limits yet!
Sharon -
Interest and taxes would be deductible as investment expenses.
The cost of fixing it up to sell would be added to basis and thus reduce a gain or increase a loss upon sale.
Your basis starts at fair market value as of the date of death of your brother. Then any additional money you stuck into it to fix it up adds to your cost basis. You may wind up with a deductible loss. -
Home As Investment
I was told I couldn't take the home as an investment on the estate return unless a family member had lived in it since my brother's death. Do you know what they might have been basing that information on? It came from a usually very well informed enrolled agent.Never taxed to my limits yet!
SharonComment
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The opposite
You got it exactly backwards. If a family member lived in the house after the death of the owner then the house would not be an investmetn and the loss would not be allowed. If no one lived int the house, then it is an investment and a loss on the sale is allowed.
In either case taxes are deductible. Interest on a mortgage may or may not be deductible. This is too complex for me to go into.Comment
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