Acquisition Date for Rental Property Sold by Estate

[randy5419]

The sale results in a large loss due to basis step-up and sales costs.   Is the Acquisition date the date the decedent acquired the property, or is it the date the Estate acquired the property (i.e., the decedent’s death date)?

This matters.  If the property is held less than a year, all of the loss offsets dividend income, whereas if it is held more than a year, only $3,000 of the loss is deductible.

Thanks for your help.

[DavidD66 · Accepted solution]

It is a long-term gain.  According to the IRS, for an estate, "property acquired from a decedent is treated as held for more than 1 year".   When asked how the property was acquired, indicate "death" or "inherited".  If the program doesn't ask, you may need to adjust the acquisition date so that it is long-term.