USA Selling expenses house 1041


Joined
Oct 24, 2020
Messages
1
Reaction score
0
Country
United States
I am working on a 1041 and I am confused on how to handle selling expenses of a house sold after death by the estate. It was sold shortly after death so there would have be no appreciation. According to the IRS, “Selling expenses (such as broker fees, survey fees, or transfer steps) are deductible if the sale is necessary in order to pay debts, expenses, administration or taxes, to preserve the estate, or to effect distribution.” The estate has sufficient assets to pay expenses, but would the selling expenses still be deductible since they effected distribution?



Also below is a sample settlement statement. Would the Sales price and Cost be $307,803.34 and the expenses I can deduct be the Brokers commission of $20,220? I can not find anything in the code or a pub that specifically says what I can do. Is there an IRC or pub that discusses this circumstance?



Thank you

1603558673185.png
 
Ad

Advertisements

kirby

VIP Member
Joined
May 12, 2011
Messages
2,127
Reaction score
291
Country
United States
Sending you a private message. Log in to the forum then click on the envelope icon at top.
 
Ad

Advertisements

Joined
Dec 5, 2020
Messages
36
Reaction score
6
Country
United States
Assuming it is a qualified personal residence, I would report the sale and disallow the resulting capital loss due to selling expenses. This would be a conservative approach and you can certainly make an argument against it. The IRS states that now capital loss is recognizable unless the decedent's personal resident is "converted [for] an income-producing purpose".

Assuming it is NOT a qualified personal residence, I would report the sale and allow the resulting capital loss, as long as the sale is NOT to a beneficiary.

See IRS advice on this: https://www.irs.gov/pub/irs-sca/1998-012.pdf
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Similar Threads


Top