Home sold in Estate

[BSTX-Estate]

I am the administrator to an estate. The deceased died at the end of 2018 and the home & assets were in probate until 2021.  The home was unoccupied and no maintenance was done the whole time (pandemic issues along with living on the east coast)

1.) I am unsure what to enter in as the FMV for the home.  I have the tax appraisals, but the home was in a hoarder type condition. No one could go inside without health risks, so a realtor assessment was not done.

We sold for $42,000 (not including the sales expenses)

2.) Also, I had to have the home professionally cleaned in order to be sold.  Can this be claimed on the taxes? Where?  The money came out of the estate bank account.

[tagteam · Accepted solution]

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@BSTX-Estate wrote:

.....I am unsure what to enter in as the FMV for the home. 

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The FMV of the house would be based upon what the house as worth as of the date of death of the decedent. An appraiser would take the condition of the property into account.

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@BSTX-Estate wrote:

....I had to have the home professionally cleaned in order to be sold.  Can this be claimed on the taxes?

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If a hypothetical individual would incur the same (nondeductible) expense as an estate, the expense is not deductible. Fix up and routine cleaning expenses in preparing a house for sale are not deductible by an individual.

However, you could make a case that the administrator was preserving estate property and, therefore, the expense was properly deductible on the 1041. The expense would be entered as miscellaneous (Other deductions on a 1041).