Discussion:Loss on Personal Residence Sold by Estate
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| {{ForumNewPost|UserID=Jdcpa01|Date=6 September 2009|Text=Ok, I have read the previous discussions but am not satisfied with the apparent conflicts, so here we go again. The Form 1041 instructions state that taxable income is figured in the same manner as that of an individual. I have read the SCA 198-012 memo and that is clear as to the IRS advice. Given this research I conclude: A) a Conservative approach would be to not take any loss related to either closing costs or upkeep expenses while the personal residence (NOT income property in any way) was held unoccupied by the estate until sold seven months after the date of death; B) a Gray Area or controversial appoach would be to take this loss as a capital loss and the related upkeep expense as "investment expenses" - I see this as risky since a home (especially in light of recent events) in not an investment property; and C) a Very Aggressive approach would be to take the FMV used for probate and take an actual capital loss upon the sale in addition to the closing costs. My client in this case wants to go "by the book" but has a K-1 showing the loss on sale PLUS the closing costs. I deem this overly adventurous and fraught with peril. Comments? }} | {{ForumNewPost|UserID=Jdcpa01|Date=6 September 2009|Text=Ok, I have read the previous discussions but am not satisfied with the apparent conflicts, so here we go again. The Form 1041 instructions state that taxable income is figured in the same manner as that of an individual. I have read the SCA 198-012 memo and that is clear as to the IRS advice. Given this research I conclude: A) a Conservative approach would be to not take any loss related to either closing costs or upkeep expenses while the personal residence (NOT income property in any way) was held unoccupied by the estate until sold seven months after the date of death; B) a Gray Area or controversial appoach would be to take this loss as a capital loss and the related upkeep expense as "investment expenses" - I see this as risky since a home (especially in light of recent events) in not an investment property; and C) a Very Aggressive approach would be to take the FMV used for probate and take an actual capital loss upon the sale in addition to the closing costs. My client in this case wants to go "by the book" but has a K-1 showing the loss on sale PLUS the closing costs. I deem this overly adventurous and fraught with peril. Comments? }} | ||
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| + | {{ForumReplyPost|UserID=Riley2|Date=6 September 2009|Text=Take a look at the Campbell and Carnick decisions. I see no gray area here. The house was never used as a residence by a beneficiary.}} | ||
Revision as of 23:27, 6 September 2009
Discussion Forum Index --> Advanced Tax Questions --> Loss on Personal Residence Sold by Estate
Discussion Forum Index --> Tax Questions --> Loss on Personal Residence Sold by Estate
| 6 September 2009 | |
| Ok, I have read the previous discussions but am not satisfied with the apparent conflicts, so here we go again. The Form 1041 instructions state that taxable income is figured in the same manner as that of an individual. I have read the SCA 198-012 memo and that is clear as to the IRS advice. Given this research I conclude: A) a Conservative approach would be to not take any loss related to either closing costs or upkeep expenses while the personal residence (NOT income property in any way) was held unoccupied by the estate until sold seven months after the date of death; B) a Gray Area or controversial appoach would be to take this loss as a capital loss and the related upkeep expense as "investment expenses" - I see this as risky since a home (especially in light of recent events) in not an investment property; and C) a Very Aggressive approach would be to take the FMV used for probate and take an actual capital loss upon the sale in addition to the closing costs. My client in this case wants to go "by the book" but has a K-1 showing the loss on sale PLUS the closing costs. I deem this overly adventurous and fraught with peril. Comments? | |
| 6 September 2009 | |
| Take a look at the Campbell and Carnick decisions. I see no gray area here. The house was never used as a residence by a beneficiary. | |
