I am completing a Schedule E for the two months of rental income and expense, during the period following my mother's death until the time the property was transferred to me, as beneficiary. I am also depreciating the building for the two month period. The new FMV is basis and the date acquired is her death date . To calculate the two months correctly, I must enter a disposal date (otherwise it calculates a full year.) Thus, TT is asking for the sales price. If I state Zero, a huge capital loss tracks to my K-1, Line 11, Code E. Should I state the sale price to be the FMV, less the two month depreciation?
The last advice given was to not report the property at all, as it is a non-taxable inheritance; however, I need to account for the property during that two month ownership by the trust? Please advise. Thanks
