The Decedent's estate will need to get an EIN and will be required to file a return and show the sale of the home as income.
Referring to the handling of the sale of the house on the Decedent's Estate's Form 1041 return is:
The cost basis of the house that is "inherited" by the estate is fmv on the date of her death.
Generally, if the property is sold shortly after the death, then the selling price can end up being considered the cost basis for the sale.
The holding period is long term with the acquisition date of the house being INHERIT on the date of death.
Since the house was the decedent's principal residence, the estate would not qualify to deduct a loss from the sale because a personal loss is not deductible.
