Solved: Trust inherited a rental house with an appraisal. House was sold below appraised value and closing was 100 days after inheritance. Cost basis - appraisal or sales price?
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Trust inherited a rental house with an appraisal. House was sold below appraised value and closing was 100 days after inheritance. Cost basis - appraisal or sales price?

 
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Level 15

Trust inherited a rental house with an appraisal. House was sold below appraised value and closing was 100 days after inheritance. Cost basis - appraisal or sales price?

If you claim the appraisal, the trust may have a deductible loss?  However, if you are audited, unless something material happened in those 100 days to the house or the local real estate market to affect the value, I suspect the IRS position would be that the sales price was the true FMV. 

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

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Level 15

Trust inherited a rental house with an appraisal. House was sold below appraised value and closing was 100 days after inheritance. Cost basis - appraisal or sales price?

If you claim the appraisal, the trust may have a deductible loss?  However, if you are audited, unless something material happened in those 100 days to the house or the local real estate market to affect the value, I suspect the IRS position would be that the sales price was the true FMV. 

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

View solution in original post

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