Estate cap gains loss from house

[mikep395]

The house in my mothers estate experienced severe water damage and will be covered by an insurance claim.  1. Is it correct that the cost basis should be adjusted by deducting the insurance payout from the Date of Death value?  2. If I sell the house as-is, the estate would still incur a capital loss.  Will I be able to transfer that loss to myself, as beneficiary, when the estate is closed?

[Critter]

1) yes ... however the fixes increases the basis so they should offset if you do fix the home

2) correct ... the loss is passed to the beneficiaries