@gloriah5200 wrote:
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.
The above quoted sentence is not quite accurate.
If the estate is the legal owner of a decedent's residence and the personal representative sells it in the course of administration, the tax treatment of gain or loss depends on how the estate holds or uses the former residence. For example, if, as the personal representative, you intend to realize the value of the house through sale, the residence is a capital asset held for investment and gain or loss is capital gain or loss (which may be deductible). This is the case even though it was the decedent's personal residence and even if you didn't rent it out.
See https://www.irs.gov/publications/p559#en_US_2020_publink100099689
