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RRDubu
Level 2

Estate Income, are the proceeds for the sale of a house considered income to the Estate?

When selling the home of an estate, are the funds and proceeds from the sale considered income, therefore requiring this to be reported on the 1041 as income to the Estate?   The total value of the estate is less than $450,000 so I am trying to determine if I am required to file a return, the house was sold at a loss.

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tagteam
Level 15
Intuit Approved!

Estate Income, are the proceeds for the sale of a house considered income to the Estate?


@RRDubu wrote:

When selling the home of an estate, are the funds and proceeds from the sale considered income, therefore requiring this to be reported on the 1041 as income to the Estate?  


The proceeds are actually just considered "proceeds"; it would be the gross sales amount. The basis would then be subtracted from the proceeds to arrive at any gain (or loss).

 

If the estate receives a 1099-S, then the IRS has no way of determining whether there is a gain or loss; they only have the gross sales figure. As a result, a return should be filed so the basis is reported to the IRS and, in this specific instance, the beneficiary(ies) may be able to take advantage of the loss passed through to them from the estate.

View solution in original post

1 Reply
tagteam
Level 15
Intuit Approved!

Estate Income, are the proceeds for the sale of a house considered income to the Estate?


@RRDubu wrote:

When selling the home of an estate, are the funds and proceeds from the sale considered income, therefore requiring this to be reported on the 1041 as income to the Estate?  


The proceeds are actually just considered "proceeds"; it would be the gross sales amount. The basis would then be subtracted from the proceeds to arrive at any gain (or loss).

 

If the estate receives a 1099-S, then the IRS has no way of determining whether there is a gain or loss; they only have the gross sales figure. As a result, a return should be filed so the basis is reported to the IRS and, in this specific instance, the beneficiary(ies) may be able to take advantage of the loss passed through to them from the estate.

View solution in original post

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