Do I need to claim a sale of Home that was left to me from death of Mother.

The attorney has the money of sale of property with home. Can I do an amendment when I get the final estate closing after the initial year of death.
jtax
Level 10

Deductions & credits

Sorry for your loss. When did you mother pass away and when was the home sold? Did title pass to you and you sold it or did you mother's estate sell it? (States differ on this). Was the house in a trust?
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Deductions & credits

My mother owned the home and she had a will. She left me the executor of the estate. She passed on March 5, 2018. The house was sold September 6, 2018. The attorney took care of the funds and put in an estate account for me. I have two brothers in the will also which we share equally.
jtax
Level 10

Deductions & credits

Thank you for the clarifications. That detail is very important.

As executor of the estate you will distribute the proceeds to the beneficiaries (after paying expenses). 

The estate is its own taxpayer. It pays tax on its income, but it gets a deduction for income paid to beneficiaries. The estate files a 1041 and gives a k-1 to each beneficiary who received a payment of income. If it does this in one tax year the trust itself will probably not pay tax. That will be "passed through" to the benes.

Note, it is income not principal that is taxed. I.e. if $100k bank account is left to you, you don't pay tax on the $100k. But rather the estate pays tax on the interest on the $100k while the estate has the money. Say that is $200. If it gives you that whole amount $100,200 it will issue a k-1 to you showing $200 of interest. That goes on your 1040. For the home your basis is the FMV when you mother died. So there is like to be very little income (gain) and maybe a loss (see below).

The estate may be on a fiscal year. Or it may not be. That is up to you as executor to decide if you properly elect so in time. Oftentimes  fa fiscal year is used so that only one year's 1041 is done. (I.e. that would let you use Mar 5 2018 to Feb 28 2019 as the estate's taxable year). For more info ask your attorney and see https://www.vjrussolaw.com/fiscal-year-vs-calendar-year-whats-best-for-you/

To answer your question depends upon the answer to the fiscal year question. If estate is on a fiscal year then you any income you get will be for TY 2019, not 2018. That is powerful and is often used to delay taxes by a year. If on the other hand it distributed income to you in 2018 and is on a calendar year, you will have to report that income in 2018. Best to wait until you have done the 1041 in that case. I would recommend filing an extension and waiting until you have all of your documents before filing your 1040. (Auto extension goes until 10/15.) You could amend, but that is a pain to do and is specially processed by the IRS. Better to wi

Also note that often there is no income on the sale of an inherited home and there can be a loss. See this prior posting for more detail. 

https://ttlc.intuit.com/questions/4261641-how-do-i-claim-the-sale-of-an-inherited-house 

In that case it is possible that the estate 1041 will cover the sale and any loss could offset other trust income (dividends, interest) meaning that you might not have any personal income to report on your own 1041. 

https://www.vjrussolaw.com/fiscal-year-vs-calendar-year-whats-best-for-you/

This is a very complicated area and it is usually best to seek the advice of local tax attorney, CPA, or enrolled agent.

You also might find IRS Pub 537 helpful. https://www.irs.gov/publications/p559

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