What are the tax codes for depreciation and how it's treated after an owner dies while having a rental house, which is sold couple years later I believe the estate that was started with the EIN provided upon final return will distribute to beneficiaries all cash accumulated less any expenses. Would there be a tax liability upon that final report 1041? I also believe depreciation prior to estate established because of the step up in valuation for the estate, any prior depreciation vanishes, and the estate starts anew with depreciation. That's the depreciation that is recovered once the unit is sold? Seeing different responses to this type of problems, thus asking if anyone knows the IRS code regs to research this.
