FMV of home in an estate - all cash deal

[Anonymous_]

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@jstrobel wrote:

Does that put it in the 6 month window? 

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There is no "6 month window". The alternate valuation date, which is the 6-month period after the date of death, is used strictly when an estate tax return (Form 706) is required to be filed and the alternate valuation will result in a lower estate tax liability.

In this instance, the IRS would not be required to accept anything less than an appraisal by a certified real estate appraiser as evidence of the fair market value on the date of death.

[Anonymous_]

@jstrobel 

[DianeW777]

You can check sales records for a home similar to your mom's around the time of death and/or use an appraiser.  Any sales of property similar in the area would be sufficient to arrive at the value on the date of death.  Keep what you find if you check yourself.  You can also go to the court house to view property sales records if you want.

Assessment is not fair market value (FMV) and therefore should not be used to make your determination.

Regardless, since the property was sold within six months of death, it's quite likely the selling price could be considered the inherited value as well.

Once you decide on the inherited value here is information to report the sale in 2023 and example (may look slightly different.

1. Inherited property that is sold is ALWAYS considered with the long term holding period regardless of when it was inherited.  This allows the capital gain tax rates for any gain, which is lower than regular tax rates.
2. Example:

The sale of inherited property can be entered using the following instructions.  

1. Open or continue your return (you can choose the Search box and type 'sale of second home' then use the Jump to link to enter your inherited sale) or follow the menu.
2. Under Wages & Income scroll to Stocks, Cryptocurrency, Mutual Funds, Bonds, Other (1099-B)
3. Answer Yes on the Did you sell any stocks, mutual funds, bonds, or other investments in 2021? screen
   • If you land on the Your investment sales summary screen, select Add More Sales
4. On the OK, let's start with one investment type screen, select Other, then Continue
5. On the Tell us more about this sale screen, enter the name of the person or institution that brokered the sale
6. On the next screen, select  Other (choose this also for inherited homes) then select  I inherited it under How did you receive this investment?

@jstrobel