Welcome back! Ask questions, get answers, and join our large community of tax professionals.
cancel
Showing results for 
Search instead for 
Did you mean: 

estate tax

taxman40
Level 1

Does a estate tax return need to be filed if only a house was sold to close the estate?

Labels (1)
0 Cheers
9 Replies 9
IRonMaN
Level 15

A 1099 was most likely generated from the sale so I think you would want to prepare one rather than deal with notices down the road.

ACME Taxes, Tatoos, Tires and Tomatoes (I had to get rid of the turtles - they kept running away)
Just-Lisa-Now-
Level 15
Level 15

the beneficiaries may have some gain or loss to include from the sale on their return as well.


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
jeffmcpa2010
Level 8

Are you talking about an "Estate Tax Return" (706), or an "Estate  Income Tax Return (1041)"

The more precise the question, the more likely the answers are to be usable.

taxman40
Level 1

I am filing a 1041. Its because the estate sold the decedents home.  Im also trying to use the section 121 exclusion so their will be no capital gain. Do you know the correct way to override the program to accomplish this.  Thanks!

0 Cheers
jeffmcpa2010
Level 8

What was the time period between the Date of Death, and the date of sale - That would be the only appreciation that is taxable, as the estate should have received a step up basis in the property to FMV as of Date of Death.

I don't believe section 121 is available.

taxman40
Level 1

Under new Section 121(d)(9), an estate or heir can exclude $250,000 of gain if the decedent used the property as his or her principal residence for two or more years during the five-year period prior to the sale.

0 Cheers
jeffmcpa2010
Level 8

Good to know.

Can that be combined with Step up Basis? (Truly asking as I don't know)

0 Cheers
taxman40
Level 1

Stepped-up basis is a tax law that applies to estate transfers. This transaction is part of the estate!

0 Cheers
jeffmcpa2010
Level 8

Edited after re-reading your last post. (And I am not sure I understand your statement about step up) The step up basis occurs at the moment of death (so to speak) so assets in the Estate - get the step up basis in computing any gains on sales. (At least that is how I have always seen it done.)

By your comment that you want to use Section 121, there must be a gain on the sale.

It seems to me that if you have a Gain, and want to take an exclusion, you would have to file the return to calculate and report the gain and claim the exclusion.