Inherited House
Stephen Seger
I’m wondering what other do for an estate return being filed with a sale of a home. If the client sells within 6 months of the death we take the cost basis as what they sold it for with zero loss and zero gain.
I’m getting push back from a client that we should be reporting a loss for closing costs paid to the realtor as a long term capital loss that will flow through to the beneficiaries. What do you all do?
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Stephen Seger President Seger Tax & Accounting LLC
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Matthew Bigelow
I think it’d be the very rare case that results in zero gain and zero loss. Market changes and expense of sale will almost certainly result in one or the other. Unless the client used the home for personal purposes and/or sold it to a related party or in a non-arm’s length transaction, a gain or loss that passes on to the beneficiaries is a virtual certainty.
Matthew Bigelow, E.A.
JLZ Business Services, Inc.
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Garry Nichols
My opinion: I think your client is correct. That is what I would do if he were my client.
Garry Nichols
Sent: Monday, March 27, 2023 10:50:55 AM
I’m wondering what other do for an estate return being filed with a sale of a home. If the client sells within 6 months of the death we take the cost basis as what they sold it for with zero loss and zero gain.
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Lee Reams
Beneficiary Loss - Loss on the sale of inherited property which was the residence of the decedent can be deductible if the beneficiary immediately attempts to rent or sell the property. (Campbell, N. Stuart, (1945) 5 TC 272; Carnrick, George, (1947) 9 TC 756, acq.) If the beneficiary was living in the house at the decedent's death, a loss will be allowed if he indicates his intention to move and does so as soon as he can locate other quarters. A reasonable time is allowed to do this. (Crawford, Mary, (1951) 16 TC 678, acq.)
On Mar 27, 2023, at 10:50 AM, Stephen Seger <sse...@segertax.com> wrote:
I’m wondering what other do for an estate return being filed with a sale of a home. If the client sells within 6 months of the death we take the cost basis as what they sold it for with zero loss and zero gain.I’m getting push back from a client that we should be reporting a loss for closing costs paid to the realtor as a long term capital loss that will flow through to the beneficiaries. What do you all do?
5300 Northland Dr NE, Suite A, Grand Rapids, MI 49525
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Stephen Seger
Thanks everyone, it just seems like with the step-up in basis a loss shouldn’t be allowed. But my opinion rarely matches up with what the government does and my brain is fried.
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Stephen Seger President Seger Tax & Accounting LLC
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