Rich Carreiro wrote:
- quote -

An estate isn't a person, so it can't have personal
property. Unless you or your sister was living in the house,
the loss is deductible.

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jmp03[at]sbcglobal.net wrote:

- quote -

As you actually sold the house within 6 months, I would
treat the actual sales price as what should have been FMV at
the date of death - unless there's some strong reason not to
(e.g. area flooding, casualty, etc.). If an estate tax
return is needed, consider the alternative valuation.

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jmp03[at]sbcglobal.net (John) asked:

- quote -

First, on the facts submitted, your joint cost basis is
$180,000 + repairs *necessary* to sell it, *some* closing
costs, etc. Ignoring the "+ factors," your cost basis is
$90,000 each, and your proceeds would be $80,000 each.

So you *may* both have a loss here.

Logic: Inheritance value is based on appraisal, and
modified as permitted (References would be Pub 17, Part
Three [Chapter 14] and related pubs noted). The limitations
on repair expense would be related to "improvements" vs.
"maintenance" issue -- except for repairs cited as necessary
in contract, or sometimes by Realtor. "Closing costs" is a
huge umbrella -- some are OK, some not, too complex to
cover.

But frankly, John, I would recommend you consult a tax
professional for this particular year's return. He/she can
better guide you the through proper reporting of this
transaction -- especially since you would be representing
your sister's interests as well as yours.

Bill

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jmp03[at]sbcglobal.net writes:

- quote -

It doesn't matter what the exact basis is in this case. The
point is that even disregarding all that stuff (and none of
it, except possibly the repairs, affects basis anyways), you
sold at a loss. And since the house is considered personal
property in this case (it was considered personal property
in the hands of your father, and you did nothing to change
the nature of the property), the loss is non-deductible.
Therefore it doesn't matter what the loss is, since it has
no tax effect.

As for your expenses from August to January, nothing is
deductible except the property taxes, if any, you paid on
it.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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Let me explain

My sister and I inherited my fathers home, Deed on Death, in
August 2003. The home at the time of my fathers death was
appraised at $180,000. We sold the home in January 2004 for
$160,000. My sister and I obviously split everything 50/50.
So now here I am doing taxes for 2004. What is the basis,
$180,000? We paid out things such as; home repairs to sell
it, insurance while it was vacant, closing costs, etc. What
is our tax situation? We did not live in the home or rent
it from August 03 to time of sale Jan. 04. Any help here is
appreciated. I am using Turbo Tax Deluxe but not 100% sure
what to do. Thanks in advance for your guidance.

John

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