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Jarrensdaddy23
New Member

Hi, as the executor of my sisters estate I sold her house November 2020. She purchased for 88.5 and sold for 95k. Lived in 5years. I do benefit from the proceeds. The estate received a 1099s. Do i need to file taxes. She had no income only disability.

 
3 Replies
tagteam
Level 15

Hi, as the executor of my sisters estate I sold her house November 2020. She purchased for 88.5 and sold for 95k. Lived in 5years. I do benefit from the proceeds. The estate received a 1099s. Do i need to file taxes. She had no income only disability.

"The estate received a 1099s."

 

If the estate sold her house, then you need to file a Form 1041 (the estate received gross income of $600 or more for the tax year).

 

See https://www.irs.gov/instructions/i1041#idm140229151947712

gloriah5200
Expert Alumni

Hi, as the executor of my sisters estate I sold her house November 2020. She purchased for 88.5 and sold for 95k. Lived in 5years. I do benefit from the proceeds. The estate received a 1099s. Do i need to file taxes. She had no income only disability.

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.

tagteam
Level 15

Hi, as the executor of my sisters estate I sold her house November 2020. She purchased for 88.5 and sold for 95k. Lived in 5years. I do benefit from the proceeds. The estate received a 1099s. Do i need to file taxes. She had no income only disability.


@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

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