CAN ESTATE TAKE SECTION 121 EXCLUSION AFTER THE CAPITAL GAINS TAX HAS BEEN CALCULATED USING THE STEP UP IN BASIS ON THE SALE OF THE HOME?
I.E. FMV DATE OF DEATH IS 500,000 ON 02/15/2021. HOME SOLD 09/15/2021 FOR 570,000. CAPITAL GAIN IS 70,000. TAX IS 7,000. CAN HEIRS NOW ADD 250,000 SECTION 121 TO THE STEP UP 500,000 TO AVOID CAP GAINS TAX?
THE ADJUSTED BASIS WITH THE SECTION 121 EXCLUSION IS 360,000. THIS WOULD BE THE BASIS USED IF THE DECEASED WERE STILL LIVING.
