Should capital losses be short term or long term for a house sold by an estate within first year? Turbo Tax for Business treating them as long-term, is that correct?

[dsreedcpa]

I am working on my father's estate return, whose sole asset was his home.  He passed away in August (became irrevocable trust) and the house was sold before the end of the year and these dates are included on the Home Sale Wks form.  Due to the selling costs of the home (commissions, etc.), the estate has a capital loss.  The software is treating this loss as long-term capital loss, is that correct as it was held by the estate less than 1 year?  If it is incorrect, how do I fix it (e.g. wait for update, manually override, etc.).  Thanks!

[tagteam · Accepted solution]

"Should capital losses be short term or long term for a house sold by an estate within first year?"

If you sell or dispose of inherited property that is a capital asset, the gain or loss is considered long-term, regardless of how long you held the property. IRC 1223(9)

See https://www.irs.gov/publications/p559#en_US_2016_publink100099658