My wife inherited property when her mother passed away 30 years ago. The property had a trailer on it that her parents lived in. Approximately 20 years ago a heavy snow destroyed the trailer and we paid to have it removed from the property. What is the proper way to enter this sale? We never lived there and she is the sole beneficiary.
1. The FMV of the property with trailer at the time of inheritance less the sale proceeds from the land.
2. The FMV of the property with trailer at the time of inheritance less the cost to remove the trailer less the sale proceeds from the land.
3. The FMV of the land only at the time of inheritance less the sale proceeds from the land.
4. Other?
Choices 1 and 2 will result in a loss, choice 3 would be a wash.
