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TX516
Level 1

Would the proceeds from the sale of personal property in an estate be listed as a distribution K1's?

Items sold include automobile (below FMV), furniture, other personal property.

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Accepted Solutions
MaryK1101
Expert Alumni

Would the proceeds from the sale of personal property in an estate be listed as a distribution K1's?

Yes, if there is no gain on the sale of personal property, it does not get reported.

@TX516

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5 Replies
AmyC
Expert Alumni

Would the proceeds from the sale of personal property in an estate be listed as a distribution K1's?

Publication 559 (2019), Survivors, Executors, and ... says:

Character of income.

 

The character of the income you receive in respect of a decedent remains the same as it would have been to the decedent if he or she were alive. If the income would have been a capital gain to the decedent, it will be a capital gain to you.

 

 

Please see  About Form 1041, US Income Tax Return for Estates and Trusts says:

Decedent's estate.

The decedent's estate is an entity that is formed at the time of an individual's death and generally is charged with gathering the decedent's assets, paying the decedent's debts and expenses, and distributing the remaining assets. Generally, the estate consists of all the property, real or personal, tangible or intangible, wherever situated, that the decedent owned an interest in at death.

 

It sounds like the car would not be included. The furniture and other personal property would be determined by cost basis vs sales price. If you sell an antique family item for $10,000, that could be taxable, depending on the basis. For most people, there is not a taxable amount on personal belongings.

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TX516
Level 1

Would the proceeds from the sale of personal property in an estate be listed as a distribution K1's?

So to clarify, there isn't any capital gains as all items were sold at or below FMV (fair market value).  So the little bit of money received from selling the furniture/used auto, is not reported as a distribution on the K1 then.  Is this correct???

MaryK1101
Expert Alumni

Would the proceeds from the sale of personal property in an estate be listed as a distribution K1's?

Yes, if there is no gain on the sale of personal property, it does not get reported.

@TX516

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runner2050
Returning Member

Would the proceeds from the sale of personal property in an estate be listed as a distribution K1's?

Late to this discussion. The requirement is to file a form 1041 if Gross Income is $600 or more. This is in the 2021 instructions for form 1041. Based on that requirement I need to file a form 1041. All the income is from sale of furniture and the Net gain will be $0. I would feel like I am dotting the i's and crossing the t's if I could enter the gross sale amount for the furniture, the fair market value and the $0 net. There does not seem to be a way to do that on TurboTax business 2021. Where in IRS documentation does it say that I don't  have to report sales that result in no gain?

 

thanks

PatriciaV
Expert Alumni

Would the proceeds from the sale of personal property in an estate be listed as a distribution K1's?

IRS Tax Topic 409-Capital Gains and Losses 

You have a capital gain if you sell the asset for more than your adjusted basis. You have a capital loss if you sell the asset for less than your adjusted basis. Losses from the sale of personal-use property, such as your home or car, aren't tax deductible.

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