Determination of basis of basis of decedent’s primary residence.

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Determination of basis of basis of decedent’s primary residence.

I am the personal representative for my brother’s estate. He in died in 2017 and the IRS has informed me that I must file a 1041 for 2017. His only asset was a condo, his primary residence for almost 20 years. Escrow for the sale of the condo will close soon. I will then distribute the proceeds. Will I be required to file a 1041 for 2018? How do I determine the basis for the condo? Is the estate entitled to the primary residence capital gain exclusion or does the estate receive a step-up in basis?

Asked on March 2, 2018 under Estate Planning, California

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

You really need to speak with an accountant as this is a complicated question. I am going to give you some links to IRS publications but estates are a different creature.  Simply basis is the cost but a step-up basis is permitted in estate proceedings becuase those that inherit take the property at the date of death value.  Get accounting help.  Good luck.
https://www.irs.gov/taxtopics/tc703
https://www.irs.gov/instructions/i8971


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