[WSBAPT] Capital gains exclusion on sale of residence for estate?

[Philip N. Jones]

The answer is no.  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  At one time such an exclusion was allowed by §121(d)(11), but that provision was repealed in 2010 by P.L. 111-312.
Of course, the estate would have received a stepped-up basis on the date of death, so the unavailability of the exclusion is not a particularly harsh result, unless the estate experienced very high post-mortem appreciation.
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 Roger Hawkes
Sent: Tuesday, March 21, 2023 5:28 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Capital gains exclusion on sale of residence for estate?

I am pretty sure it is 'yes' if there is proof the decedent lived there for part of the five year look back.  As always, I could be wrong.

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 Eric Nelsen
Sent: Tuesday, March 21, 2023 5:02 PM
To: 'WSBA Probate & Trust Listserv' <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: [WSBAPT] Capital gains exclusion on sale of residence for estate?

I can never remember how this works and have to be re-taught every time-if an estate sells a decedent's residence a year after death and there is a small capital gain due to post-death appreciation, can the estate take advantage of the decedent's $250,000 exclusion on capital gains from sale of residence?

Sincerely,

Eric

Eric C. Nelsen
Sayre Law Offices, PLLC
1417 31st Ave South
Seattle WA 98144-3909
206-625-0092
eric at sayrelawoffices.com<mailto:eric at sayrelawoffices.com>

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