@fanfare wrote:
What instances, for example?
One example would be homestead property (certain states). A specific example would be if the children and/or spouse of the decedent were using the property as their primary residence, then title would vest immediately upon death.
@fanfare wrote:
If the FMV is the selling price, the estate had a loss which is less than $600.
So again an estate tax return is not required, except perhaps to pass out that loss on a K-1.
No, with the property being held by the estate (presumably with the executor having applied for an EIN), the basis would have to be established to show that there was less than a $600 gain (or a loss).
If a 1099-S is issued in the name of the estate and with its EIN, the only piece of information the IRS has would be the gross proceeds. Without a return, the IRS would have no way of knowing whether there was a gain or a loss and, if so, to what extent.
Further, unless the property were being held for personal use by the estate (e.g., an heir, family member, et al, was living there), the beneficiaries could deduct a loss from their income tax returns (a loss that would have to be passed through via a K-1).
