As far as utility expenses, HOA fees, repairs, pressure washing, insurance, etc. all of that is normal upkeep expenses of the estate. The estate pays for those things until the property is sold. None of that would be in the basis of the house. That is routine maintenance paid out of the estate. It is the fiduciary responsibility of the executor to sell things and distribute quickly, this is one of the reasons.
This is just a community forum. You have been answered by some of the oldest and wisest among us. I spend a week with the IRS each year. The laws change and inherited property is usually simple because a person inherits and sells fairly quickly so there is no profit in selling it soon after death. We don't really see people holding onto inherited property for a long time unless they were living there.
We see in Pub 551:
Settlement costs.
Your basis includes the settlement fees and closing costs for buying property. You can't include in your basis the fees and costs for getting a loan on property. A fee for buying property is a cost that must be paid even if you bought the property for cash.
The following items are some of the settlement fees or closing costs you can include in the basis of your property.
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Abstract fees (abstract of title fees).
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Charges for installing utility services.
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Legal fees (including title search and preparation of the sales contract and deed).
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Recording fees.
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Surveys.
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Transfer taxes.
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Owner's title insurance.
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Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions.
We also see:
Inherited Property
The basis of property inherited from a decedent is generally one of the following.
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The FMV of the property at the date of the individual's death.
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The FMV on the alternate valuation date if the personal representative for the estate chooses to use alternate valuation. For information on the alternate valuation date, see the Instructions for Form 706.
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The value under the special-use valuation method for real property used in farming or a closely held business if chosen for estate tax purposes. This method is discussed later.
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The decedent's adjusted basis in land to the extent of the value excluded from the decedent's taxable estate as a qualified conservation easement. For information on a qualified conservation easement, see the Instructions for Form 706.
If a federal estate tax return doesn't have to be filed, your basis in the inherited property is its appraised value at the date of death for state inheritance or transmission taxes.
For more information, see the Instructions for Form 706.
@cjpzz1
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