How to report sale of decedent's residence on form 1041

[789349]

it is rental must go on form 4797 recapiture depreciation. Where do you put the date of sale on the rental income schedule

[ScruffyCurmudgeon]

Please see attachment which demonstrates how to report and file on the sale of a Decedent's personal residence not subsequently used by anyone including any rental.

[r85712]

The last of my two parents died in May 2022. The home was in their revocable trust that now becomes irrevocably at the second death. The home was sold in August 2022. We have an EIN for the now irrevocably trust . I’m assuming we’ll receive a form 1099-S under the tax ID of the trust. I am planning to purchase the Turbo Tax Personal and Business software that should permit me to report the sale of the family home on form 1041, used for trusts and estates. There would be essentially no capital gain because the home receives a step-up in basis at death, and because the sale date was in close proximity to the date of death, there should be no capital gain or loss on the sale. I will distribute form 1041, K-1s to myself and my siblings to report their share of the transaction. Each K-1 should report zero taxable income in this case. The only other trust asset was some near worthless land that we’ll deal with later. Does my thinking and tax treatment of the home appear correct?

[ScruffyCurmudgeon]

1. The death of a family member is always so traumatic and the interaction with taxation issues only extends the process. 
2. Given that the "house"  sale occurred after the date of death and under the condition that no one subsequently used the house as a personal residence nor was the house rented* or leased*, the sale will be reported as Sale of an Investment by the Trust on its own IRS Form 1041 (prepared and submitted by the Decedent's Personal Representative [new wording for "Executor"] .
                    * - renting or leasing the house adds issues not covered in this reply
3. The Form 1041 for Estates and Trusts is NOT produced by any of the Personal Products - meaning that the Home & Business does not produce a Form 1041.  If using TurboTax, the appropriate product is the "Business" Product [unfortunately named almost like H&B] and if needed, any associated state-level filing report module.
4. Even if there is no gain realized on the sale, it is still best, both for reconciling any possible state or Federal taxation issues and for memorializing the distribution of any assets to beneficiaries, to have the Form 1041 filed.  Indeed if the sale price was the same or less than the stepped-up cost basis (inclusive of selling costs) then the loss, if any, or gain, if any, would be so reported. 
5. It is the responsibility of the Realtor or Conveying Attorney to report and supply the Form 1099-S to the seller.
6. The Form 1041 will generate a companion "Schedule K-1(1041) form that does not report transfer of assets as such but reports the distribution of any income or transferable losses or credits to the beneficiaries.  Again, even a zero entry is best reported instead of discarding what might be considered a no-value schedule.
7. The beneficiaries (YOU) the can use the Personal tax products to report any such entries (if there are any) when you prepare your own Form 1040.

@r85712