@freddytax wrote:
$800K - $600K - $55K - $250K = <$105K> so no capital gains
Sound right?
As for your question for Q2 I need to find that out!
Yes.
If the estate owns the house, the estate will file Form 1041 to report all income of the estate, including the sale of the home. Similar to Q-1, there will be a step-up in Basis. After factoring in sales expenses, there likely will be a loss. The estate's 1041 will give a K-1 to all beneficiaries, then that K-1 will be entered on your personal tax return to report any gain or loss (there could be other items of gain or less in the estate).
If the estate's total assets are worth less than $13-million-ish, there will not be an "estate tax" on the assets.
I recommend that the executor of the estate go to a tax professional to have any required estate returns filed (such as the Form 1041 to report income or losses, including the sale of the house).
