When Reporting the Sale of an Inherited Home (1099-S received for property transferred to my wife upon her mother's passing in 2020) can her step-up basis (FMV on Date of Death which we obtained via an appraisal) be adjusted in Part II Long Term Transactions on Form 8949 via Code E (box 1f) to include expenses incurred to prepare for sale of the property and/or certain escrow costs which would result in a Long Term Capital Loss? If so, I need help to determine which expenses/escrow costs incurred can be included in this adjustment.
The Date of Death Appraisal in Feb 2020 was $328,000 and the Gross Proceeds of the sale in June 2020 reported on Form 1099-S is $319,900 (property legally transferred via a trust to my wife in Mar 2020), so based on the difference between the step-up basis and Gross Proceeds on Form 8949, she has NO Long Term Capital Gain to report, however, if adjustments are allowed via Code E in box 1(f), we would like to include all that are allowed such that we can benefit as much as possible to offset other Long-Term Capital Gains incurred in 2020 and in carryover for future years.
I have broken down these expenses and escrow costs which I can easily share so please advise if adjustments are permissable and I will share these immediately to see which ones qualify. Thanks in advance for your assistance as there appears to be a LOT of confusion out there concerning the reporting of sale of an Inherited Home!
