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

[John J. Sullivan, Esq.]

No.

"If the estate is the legal owner of a decedent's residence and the personal
representative sells it in the course of administration, the tax treatment
of gain or loss depends on how the estate holds or uses the former
residence. For example, if, as the personal representative, you intend to
realize the value of the house through sale, the residence is a capital
asset held for investment and gain or loss is capital gain or loss (which
may be deductible). This is the case even though it was the decedent's
personal residence and even if you didn't rent it out. If, however, the
house isn't held for business or investment use (for example, if you intend
to permit a beneficiary to live in the residence rent free and then
distribute it to the beneficiary to live in), and you later decide to sell
the residence without first converting it to business or investment use, any
gain is capital gain, but a loss isn't deductible."

Publication 559 (2022), Survivors, Executors, and Administrators | Internal
Revenue Service (irs.gov)
<https://www.irs.gov/publications/p559#en_US_2022_publink100099689> 

John J. Sullivan

 

From: wsbapt-bounces at lists.wsbarppt.com <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>
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> 

 

Covid-19 Update - All attorneys are working remotely during regular business
hours and are available via email and by phone. Videoconferencing also is
available. Signing of estate planning documents can be completed and will be
handled on a case-by-case basis. Please direct mail and deliveries to the
Seattle office.

 

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