Basis of inherited property

Forum|Forum|3 years ago
August 23, 2022
2 replies
11 views

New client:

1 Mother died in 2022.

2 At time of death only asset was her residence, which bank appraiser valued 1.2M in CA.

3 Market has since tanked and will be sold for approx $800K.

4. Is this taxable loss to be allocated to beneficiaries via 1041 K1's ?

5 Short term or long term capital loss?

thanks in advance for assistance

Lacerte Tax

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Best answer by TaxGuyBill

Assuming no personal use of the property, yes, it would be a long term capital loss.

However, the value dropping by $400,000 (33%) in less than 8 months seems rather questionable. Is the sale price of $800,000 FMV? Is there an appraisal for the current value? Is it being sold to a related party?

T

TaxGuyBillAnswer

Level 15

Assuming no personal use of the property, yes, it would be a long term capital loss.

However, the value dropping by $400,000 (33%) in less than 8 months seems rather questionable. Is the sale price of $800,000 FMV? Is there an appraisal for the current value? Is it being sold to a related party?