[WSBAPT] Question about capital gains tax in probate/Referral request

Philip N. Jones pjones at duffykekel.com
Mon Jul 31 09:57:29 PDT 2023 

There may be exceptions to the following, but my response is that your proposed transaction will cause the gain to be recognized by the individual beneficiary, unless the distribution was in satisfaction of a pecuniary devise.
This is somewhat of a minefield, so be sure to sit down with a fiduciary income tax expert and make sure that he/she is familiar with all of your facts.
Phil Jones

Philip N. Jones
Duffy Kekel LLP
900 S.W. Fifth Ave. Suite 2500
Portland, OR 97204
pjones at duffykekel.com<mailto:pjones at duffykekel.com>
(503) 226-1371 - office
(503) 853-1482 - cell
(503) 226-3574 - fax

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Candace Wilkerson
Sent: Monday, July 31, 2023 9:39 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Question about capital gains tax in probate/Referral request

Thanks, Philip, that's very helpful!  Does it make any difference, for capital gains purposes, if the estate deeds title to a piece of estate property to an individual, and then that individual sells the property rather than the PR selling the property on behalf of the estate (as long as it's within the same short timeframe during which the PR might have sold the property)?

Best,
Candace

*Candace is available to respond to emails and phone calls between the hours of 7:00 a.m. and 3:00 p.m.  If you have an urgent matter outside that time period, please call our office at the number below.


[cid:image001.png at 01D9C395.69B1E570]
Top Ranked Law Firm for 2015 by Fortune Magazine and American Lawyer Media
Candace Wilkerson  | Senior Associate  |  Wong Fleming

9840 Willows Road NE, Suite 200  |  Redmond, WA 98052
Phone: 425.869.4040  |  Fax: 425.869.4050
cwilkerson at wongfleming.com<mailto:cwilkerson at wongfleming.com>

Please leave us a review on Google by clicking here<https://www.google.com/search?q=google+wong+fleming&rlz=1C1SQJL_enUS925US925&oq=google+wong+fleming&aqs=chrome..69i57j69i64.2183j1j4&sourceid=chrome&ie=UTF-8>.
Please leave us a review on Yelp by clicking here.<https://www.yelp.com/biz/wong-fleming-redmond>
[cid:image003.png at 01D9C395.69B1E570]
[A logo for a company  Description automatically generated with low confidence]
Before proceeding, please note: If you are not a current client of Wong Fleming, please do not include any information in this e-mail that you or someone else considers to be of a confidential or secret nature. Wong Fleming has no duty to keep confidential any of the information you provide. Neither the transmission nor receipt of your information is considered a request for legal advice, securing legal services or retaining a lawyer. An attorney-client relationship with Wong Fleming or any lawyer at Wong Fleming is not established until and unless Wong Fleming agrees to such a relationship as reflected in a separate writing.

IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (a) avoiding penalties under the Internal Revenue Code or (b) promoting, marketing or recommending to another party any transaction or matter addressed herein.
THIS ELECTRONIC MAIL TRANSMISSION AND ANY ATTACHMENTS MAY CONTAIN PRIVILEGED, CONFIDENTIAL, OR PROPRIETARY INFORMATION INTENDED ONLY FOR THE PERSON(S) NAMED. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT OR THE AUTHORIZED REPRESENTATIVE OF THE INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISTRIBUTION, COPYING, OR DISCLOSURE OF THIS COMMUNICATION IS STRICTLY PROHIBITED

This communication is from a debt collector.
This is an attempt to collect a debt and any information obtained will be used for that purpose.

CONSUMER OPT-OUT: Please note that you may opt out of receiving further email communications to this email address by replying to this email with the word "stop" in the subject line. While the firm will comply with your request to opt out of receiving further electronic communication to this email address, please be advised that the firm may still be required by applicable law or court rule to provide you with certain notices or pleadings.


From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> On Behalf Of Philip N. Jones
Sent: Friday, July 28, 2023 1:05 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Question about capital gains tax in probate/Referral request

If a single person dies owning a residence, and her estate sells the residence, no §121 exclusion will be available to the estate, for the simple reason that §121 contains no provision allowing an exclusion to an estate.  At one time such an exclusion was allowed by §121(d)(11), but that provision was repealed in 2010 by P.L. 111-312.  The lack of an exclusion will normally not produce a very harsh result, since the estate will have received a stepped-up basis as of the date of death.  §1014(a)(1).
Phil Jones

Philip N. Jones
Duffy Kekel LLP
900 S.W. Fifth Ave. Suite 2500
Portland, OR 97204
pjones at duffykekel.com<mailto:pjones at duffykekel.com>
(503) 226-1371 - office
(503) 853-1482 - cell
(503) 226-3574 - fax

From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> On Behalf Of Craig Gourley
Sent: Friday, July 28, 2023 9:59 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Question about capital gains tax in probate/Referral request

Also. Section 121 on residential use is 2 of the last 5 years.

Sent from my Verizon, Samsung Galaxy smartphone
Get Outlook for Android<https://url.emailprotection.link/?bnKo2lzP2-5ZU6Z9gMslcUGIiM8h2ojsSWtWlRdFPKd5trDSzfOOe2FkUaBuLfYYZ3kPH9zxe-zwJgw5CArtGYg~~>
________________________________
From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> on behalf of Philip N. Jones <pjones at duffykekel.com<mailto:pjones at duffykekel.com>>
Sent: Friday, July 28, 2023 8:49:09 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Question about capital gains tax in probate/Referral request


As you hint, the estate received a new basis step-up, so the post-mortem capital gains should be very small.  Since the market is pretty flat right now, there might not be any.  In a market like this, many practitioners would use the sale price as the DOD value (basis), even though seven months have gone by.  And any expenses of sale need to be used to reduce the gain, and not used as administration expenses (not many people know this).  So I don't think you have much to worry about.  And your non-client does not have much to worry about.  (But if the PR is not a client, why are you giving her advice?  Since she has an accountant, she should ask the accountant.)

(For those of you who purchased my fiduciary income tax book, see chapter 13 on capital gains and losses.)

Phil Jones



Philip N. Jones

Duffy Kekel LLP

900 S.W. Fifth Ave. Suite 2500

Portland, OR 97204

pjones at duffykekel.com<mailto:pjones at duffykekel.com>

(503) 226-1371 - office

(503) 853-1482 - cell

(503) 226-3574 - fax



From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> On Behalf Of Candace Wilkerson
Sent: Friday, July 28, 2023 8:39 AM
To: 'WSBA Probate & Trust Listserv' <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: [WSBAPT] Question about capital gains tax in probate/Referral request



Hi all,



I do a lot of probate cases, but am not an expert on capital gains.  I recently received a question from a PC (who is doing a DIY probate in King County) about capital gains liability for an estate when the estate house gets sold in Washington State.  The Decedent had lived there for 58 years(!) and he only died 7 months ago.  The personal representative (who is not a client) asked me to give her an idea of how much the estate would owe in capital gains taxes, and how much she should hold back from distributions to the will beneficiaries in case the amount the estate pays for capital gains taxes isn't correct.



I know it depends on the amount of appreciation, if any, in the property value after Decedent's death, whether any of the beneficiaries has lived on the property for the last 3 of 5 years, etc.  No transfer of title has been made to any will beneficiary; the property sale is being done by the PR.  I told her all of this, as well as to make sure the tax accountant she's using assists her in determining the correct payment for capital gains.



If she comes back to me with more questions, is there anyone willing to do a (paid) consult with her to discuss her questions?  I don't want to give her incorrect information.



And, for this matter, if anything I've written is incorrect I'd appreciate a correction.



Thanks!

Candace Wilkerson



*Candace is available to respond to emails and phone calls between the hours of 7:00 a.m. and 3:00 p.m.  If you have an urgent matter outside that time period, please call our office at the number below.





[cid:image001.png at 01D9C395.69B1E570]

Top Ranked Law Firm for 2015 by Fortune Magazine and American Lawyer Media

Candace Wilkerson  | Senior Associate  |  Wong Fleming



9840 Willows Road NE, Suite 200  |  Redmond, WA 98052
Phone: 425.869.4040  |  Fax: 425.869.4050
cwilkerson at wongfleming.com<mailto:cwilkerson at wongfleming.com>



Please leave us a review on Google by clicking here<https://url.emailprotection.link/?baf6tmSi8Q8A-qOCy4k25ZuFLhyHmMqwv-ELJRzJQ8gLVba3Z8jeHPxTxt1xwmdZE0fzKG0emLLsVhvuioUkWXFFmZMBYpRkCCwhyokvdYO-jWTh9kzkBvQSBmJupzXQjtHZTRFeiP6joKiaQjCxwdi_jpyOlBHYGai1Tf4iw_H5tTpxEcwPykTkJ7Uk8HSCYuUsQbJFazUdD3emwQnk1QQ~~>.

Please leave us a review on Yelp by clicking here.<https://url.emailprotection.link/?bPLIs0SLoZ_mobljRyGQy47Yoe2hRKIfP5qOwHsAqftn6ukBiyuigk-ve5Wwa7IrqIMz2IGa1Y9raisrtcPkAGFdkg1PWdoCwYuoujYgAknnXny2U2lKd7z9eFGvsFtEf>

[cid:image003.png at 01D9C395.69B1E570]

[A logo for a company    Description automatically generated with low confidence]

Before proceeding, please note: If you are not a current client of Wong Fleming, please do not include any information in this e-mail that you or someone else considers to be of a confidential or secret nature. Wong Fleming has no duty to keep confidential any of the information you provide. Neither the transmission nor receipt of your information is considered a request for legal advice, securing legal services or retaining a lawyer. An attorney-client relationship with Wong Fleming or any lawyer at Wong Fleming is not established until and unless Wong Fleming agrees to such a relationship as reflected in a separate writing.

IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (a) avoiding penalties under the Internal Revenue Code or (b) promoting, marketing or recommending to another party any transaction or matter addressed herein.

THIS ELECTRONIC MAIL TRANSMISSION AND ANY ATTACHMENTS MAY CONTAIN PRIVILEGED, CONFIDENTIAL, OR PROPRIETARY INFORMATION INTENDED ONLY FOR THE PERSON(S) NAMED. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT OR THE AUTHORIZED REPRESENTATIVE OF THE INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT ANY DISTRIBUTION, COPYING, OR DISCLOSURE OF THIS COMMUNICATION IS STRICTLY PROHIBITED



This communication is from a debt collector.

This is an attempt to collect a debt and any information obtained will be used for that purpose.



CONSUMER OPT-OUT: Please note that you may opt out of receiving further email communications to this email address by replying to this email with the word "stop" in the subject line. While the firm will comply with your request to opt out of receiving further electronic communication to this email address, please be advised that the firm may still be required by applicable law or court rule to provide you with certain notices or pleadings.




-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/wsbapt/attachments/20230731/ff142b1a/attachment.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image001.png
Type: image/png
Size: 64076 bytes
Desc: image001.png
URL: <http://mailman.fsr.com/pipermail/wsbapt/attachments/20230731/ff142b1a/image001.png>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image002.png
Type: image/png
Size: 151 bytes
Desc: image002.png
URL: <http://mailman.fsr.com/pipermail/wsbapt/attachments/20230731/ff142b1a/image002.png>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image003.png
Type: image/png
Size: 5985 bytes
Desc: image003.png
URL: <http://mailman.fsr.com/pipermail/wsbapt/attachments/20230731/ff142b1a/image003.png>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image004.jpg
Type: image/jpeg
Size: 5042 bytes
Desc: image004.jpg
URL: <http://mailman.fsr.com/pipermail/wsbapt/attachments/20230731/ff142b1a/image004.jpg>

More information about the WSBAPT mailing list