A now deceased client owned a home in La Jolla CA for over 40 years. The house was sold just before she passed away. The net gain will be about $450K. Pro Series is calculating a Net Investment Tax. I don't think this is correct but can't find a reference that says a home sale would be excluded. Any help?
Have to wonder if this was the result of poor tax planning, or poor death planning. What are you using for basis? Was she always the sole owner, or was there a husband who died and would leave her with stepped-up basis in community property?