Business & farm

 Sorry for your loss. "It seems natural to compute the step-up basis value (i.e., the value of the home at the time of my mom’s death) as the gross sale price less the cost of improvements that the estate incurred prior to the sale (and of course after my Mom’s death)."  YES that's what is done. Yes there's usually a capital loss if sold shortly afterward due to closing costs involved. 

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