My dad passed in June of 2024, he didn't have any money only his house with a mortgage.
In order to payoff his mortgage and other normal bills (power, water, etc) the executor sold the house during probate. In the will the house was to go to my brother. but he agreed to let the executor sell it and signed a quit claim deed.
We don't have a FMV of the house from June 2024 but in September 2024 (3 months later) we had an appraisal done during the sell process. I plan on using the appraisal value as my basis on the tax forms as a stepped up value.
In October 2024 we sold the house for 190K which is less than the September 2024 appraisal value 218K because we really could not afford to keep paying his mortgage and other monthly bills.
Question 1 On the tax forms you have to put when you acquired the house.
I am not sure if they want when my dad acquired the house in 2005 ( For 128K) or when the estate acquired the house in June 2024 ( September 2024 appraisal 218K) when he passed. This date would make the difference between long term and short term capital gains on the tax forms.
Question 2 is it ok to use the September 2024 appraisal value of 218K at my stepped up cost basis? it is 3 months after his death but it is all I have to go on. I assume the house value on his date of death would be close.
Question 3 I know I have to do a 1041 for the estate and a 8949 and schedule D ( reporting it as capital gain/loss) and some K1 but they should all be zero because we sold at a loss. Form 8949 asks for proceeds which I assume is the 190K sales price. But I don't see where on the form where i deduct what we spent on commissions and closing costs. Where do I enter what we paid for commissions and closing costs?
So far I have proceeds = 190K sales price minus my stepped up cost basis of 218K = 28K loss
but it should be more than that because we paid $9,500 in commissions, $55 for a lawyer fee and $1,262 in property taxes (total = 10,817) so my total loss should be like $38,817
Obviously we shouldn't own any taxes but I at least want it to be correct so the IRS don't come knocking on my door. And because we own no tax the K1's should be zero.
Question 4 any other forms I'm missing beside 1041, 8949, schedule D for 1041 and K1?
Question 5 Am i right in assuming the stepped up cost basis of 218K since the house is being sold by the estate in probate and it never actually was inherited by my brother? no one lived in the house and we never rented it out either. My dad used it as his primary residence for 20 years and paid 128K for it back in 2005.
anything that is left from the estate which isn't much after the mortgage is paid off and executor fees will be split evenly among the heirs
Thank you for your help
