@robertmeyer310 wrote:
Is the sale of house incorporated into an estate tax return? And then money just distributed to five beneficiaries?
Yes, if the estate sold the property and received the proceeds, then the transaction will be reported on the estate's income tax return (Form 1041).
The estate, as the current owner of the property, will receive a stepped up basis to its fair market value as of the date of death of the decedent per Section 1014 of the Code. The result should be the recognition of neither gain nor loss assuming the sale transpires reasonably close (in terms of a time period) to the death of the decedent.
The proceeds can be distributed to the beneficiaries and, if there is no gain on the sale, they would have no income tax liability flowing through from the estate to their K-1s on this particular transaction.
