Sale of inherited home

[louisleichter909]

My wife's mother died in 2020. My wife put the house up for sale within a few months and it sold in 2020. The realtor (who she assumes knows the value of property in the area) listed the house at 89,900. It quickly sold for 95,900 (a bidding war).  Is the basis 89,900 or 95,900? After closing costs and fees, the house sold for 85,900. Can she claim a capital loss? How much?

[Anonymous_]

If the estate was the legal owner and the property was not used for personal purposes, but held for investment purposes, a loss can be deductible.

See https://www.irs.gov/publications/p559#en_US_2020_publink100099689

The basis would still be the fair market value on the date of death of the decedent regardless of the selling price.