Yes, I understand that there would be no tax to pay as the FMV is what the house sold for.
But, if we complete a 1041 it asks for Income and Deductions. The asset already belongs to the estate, so it isn't really external income. How would that be represented on the 1041?
If there is a K-1 issued, wouldn't that have to be reported on my sole tax return? And wouldn't it show as income, when actually it's just inheritance and thus non-taxable?
Confusing!
