<div dir="ltr"><div class="gmail_default" style="font-family:arial,sans-serif">Thank you all for the input. </div><div class="gmail_default" style="font-family:arial,sans-serif"><br></div><div class="gmail_default" style="font-family:arial,sans-serif">I will tell you that we are not talking taxable at all. My concern is that there are 7 beneficiaries, this is the only asset. There is a private party willing to purchase - and no, I do not know if there is any connection as to why the Executor would want to save them money - and the Executor is staying adamant that since they don't need to use a Real Estate agent to list the mobile home, that the Executor can reduce the "market valuation" by the amount of what would have been paid in commission. </div><div class="gmail_default" style="font-family:arial,sans-serif"><br></div><div class="gmail_default" style="font-family:arial,sans-serif">This is a very modest estate - less than $250k total - which is why I worry that some of the beneficiaries may take issue with the fact that the amount available for distribution will be reduced by about $20,000. The essence of her argument is that the end amount would be about the same IF a Real Estate agent is used, and since they are not using a professional Real Estate agent that its appropriate to lower the price. </div><div class="gmail_default" style="font-family:arial,sans-serif"><br></div><div class="gmail_default" style="font-family:arial,sans-serif"> </div><div><div dir="ltr" class="gmail_signature" data-smartmail="gmail_signature"><div dir="ltr"><div dir="ltr"><p><b><span style="font-family:"Times New Roman",serif">Brent
Williams-Ruth</span></b><span style="font-family:"Times New Roman",serif"> (pronouns: he/him)<br>
<i>Attorney-At-Law</i></span></p><p><b><span style="font-family:"Times New Roman",serif">Law
Offices of Brent Williams-Ruth, </span></b><b><span style="font-family:"Times New Roman",serif"><font size="1">a division of BWR Consulting, PLLC</font></span></b><b><span style="font-family:"Times New Roman",serif"></span></b></p><p><b><span style="font-family:"Times New Roman",serif">Physical Address: 500 S 336th Street, Suite 214; Federal
Way, WA 98003</span></b><span style="font-family:"Times New Roman",serif"></span></p><p><b><span style="font-family:"Times New Roman",serif"><font color="#ff0000">**EFFECTIVE IMMEDIATELY**</font> All mail sent through the USPS should be sent to the following address: </span></b><b><span style="font-family:"Times New Roman",serif">PO BOX 3319; Federal Way, WA 98063 </span></b></p><p><span style="font-family:"Times New Roman",serif">Office/Scheduling
Phone:<span style="color:#004080"> </span><font color="#ff0000">(253) 285-7751</font></span></p><p><span style="font-family:"Times New Roman",serif">Direct:<font color="#ff0000"> (253) 285-7453</font></span></p><p>
</p><p><span style="font-family:"Times New Roman",serif"><a href="mailto:Brent@Williams-RuthLaw.com" target="_blank">e-mail</a> / <a href="http://www.williams-ruthlaw.com/" target="_blank">website</a> /</span><span style="font-size:9.5pt;font-family:"Times New Roman",serif"> </span><span style="font-family:"Times New Roman",serif"><a href="http://www.facebook.com/bwrlaw" target="_blank"><span style="font-size:9.5pt">facebook</span></a></span><span style="font-size:9.5pt;font-family:"Times New Roman",serif"> / </span><span style="font-size:12.0pt;font-family:"Times New Roman",serif"></span></p></div></div></div></div><br></div><br><div class="gmail_quote"><div dir="ltr" class="gmail_attr">On Thu, Jun 23, 2022 at 9:36 PM Joshua McKarcher <<a href="mailto:josh@mckarcherlaw.com">josh@mckarcherlaw.com</a>> wrote:<br></div><blockquote class="gmail_quote" style="margin:0px 0px 0px 0.8ex;border-left:1px solid rgb(204,204,204);padding-left:1ex">
<div lang="EN-US" style="overflow-wrap: break-word;">
<div class="gmail-m_-7093258760935588175WordSection1">
<p class="MsoNormal"><span style="font-size:12pt;font-family:"Times New Roman",serif">This is a good reason to ensure the CPA preparing estate/trust returns understands these points so that such losses (or in other cases, taxable income) can properly be distributed
timely (in the case of income) and reported out to beneficiaries for (usually) maximum tax efficiency. Also a good reason to review such returns before finalized.
<u></u><u></u></span></p>
<p class="MsoNormal"><span style="font-size:12pt;font-family:"Times New Roman",serif"><u></u> <u></u></span></p>
<p class="MsoNormal"><span style="font-size:12pt;font-family:"Times New Roman",serif">(A fiduciary client recently used H&R Block for what they assumed was a simple irrevocable trust income tax return before the CPA or I knew. Gah. Thankfully it made a difference
of hundreds of dollars and not thousands of dollars.)<u></u><u></u></span></p>
<p class="MsoNormal"><span style="font-size:12pt;font-family:"Times New Roman",serif"><u></u> <u></u></span></p>
<p class="MsoNormal"><span style="font-size:12pt;font-family:"Times New Roman",serif">Now, for some reason I have this feeling that Brent’s client isn’t angling about any of this – but I’m happy to be wrong.
</span><span style="font-size:12pt;font-family:"Segoe UI Emoji",sans-serif">😉</span><span style="font-size:12pt;font-family:"Times New Roman",serif"><u></u><u></u></span></p>
<p class="MsoNormal"><span style="font-size:12pt;font-family:"Times New Roman",serif"><u></u> <u></u></span></p>
<div>
<div style="border-right:none;border-bottom:none;border-left:none;border-top:1pt solid rgb(225,225,225);padding:3pt 0in 0in">
<p class="MsoNormal"><b>From:</b> <a href="mailto:wsbapt-bounces@lists.wsbarppt.com" target="_blank">wsbapt-bounces@lists.wsbarppt.com</a> <<a href="mailto:wsbapt-bounces@lists.wsbarppt.com" target="_blank">wsbapt-bounces@lists.wsbarppt.com</a>>
<b>On Behalf Of </b>Philip N. Jones<br>
<b>Sent:</b> Thursday, June 23, 2022 9:03 PM<br>
<b>To:</b> WSBA Probate & Trust Listserv <<a href="mailto:wsbapt@lists.wsbarppt.com" target="_blank">wsbapt@lists.wsbarppt.com</a>><br>
<b>Subject:</b> Re: [WSBAPT] Valuation of Property: List Price vs. Net Proceeds?<u></u><u></u></p>
</div>
</div>
<p class="MsoNormal"><u></u> <u></u></p>
<p class="MsoNormal"><span style="font-size:16pt;font-family:"Times New Roman",serif">If the question is how the sale is treated for fiduciary income tax purposes, here is the answer:</span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-size:16pt;font-family:"Times New Roman",serif"> </span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-size:16pt;font-family:"Times New Roman",serif">Let’s assume that the house is sold on the open market a few months after the date of death, through the services of a professional real estate broker. That sale usually
determines the fair market value of the residence, and it is not unreasonable to use that sale price as the fair market value on the estate tax return and as the post-mortem income tax basis of the residence. But how are the broker’s commission, the title
insurance premium, and related closing costs handled for tax purposes? The expenses of sale are usually not deductible on an estate tax return under §2053(a)(2) or against ordinary income for fiduciary income tax purposes. Instead, those expenses are offsets
against the selling price to reduce gain or to increase loss. <i>Scull v. Commissioner</i>, T.C. Memo 1994-211, n. 14. But because the sale price is also the basis, offsetting those closing costs will produce a capital loss. That loss can be offset against
capital gains, and if the losses exceed the gains (as noted above), the excess can be deducted up to $3,000 per year against ordinary income. If the sale takes place in the final year of the estate (and modest estates often have only one tax year, which is
both the first tax year and also the final tax year), then the loss flows out to the beneficiaries, who can use the loss to offset their own capital gains, and any net loss of each beneficiary can be deducted against ordinary income by each beneficiary up
to $3,000 per year under §1211(b). §1.642(h)-1(c).</span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-size:16pt;font-family:"Times New Roman",serif">If a discount is granted to reflect the absence of a broker, my guess is that the FMV is the higher of the two prices, but I can’t offer any authority on point.</span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-size:16pt;font-family:"Times New Roman",serif">Phil Jones
</span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-size:14pt;font-family:"Times New Roman",serif"> </span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-size:14pt;font-family:"Times New Roman",serif"> </span><u></u><u></u></p>
<div>
<p class="MsoNormal"><span style="font-size:14pt;font-family:"Times New Roman",serif">Philip N. Jones</span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-size:14pt;font-family:"Times New Roman",serif">Duffy Kekel LLP</span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-size:14pt;font-family:"Times New Roman",serif">900 S.W. Fifth Ave. Suite 2500</span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-size:14pt;font-family:"Times New Roman",serif">Portland, OR 97204</span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-size:14pt;font-family:"Times New Roman",serif"><a href="mailto:pjones@duffykekel.com" target="_blank"><span style="color:rgb(5,99,193)">pjones@duffykekel.com</span></a></span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-size:14pt;font-family:"Times New Roman",serif">(503) 226-1371 – office</span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-size:14pt;font-family:"Times New Roman",serif">(503) 853-1482 – cell</span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-size:14pt;font-family:"Times New Roman",serif">(503) 226-3574 - fax</span><u></u><u></u></p>
</div>
<p class="MsoNormal"><span style="font-size:14pt;font-family:"Times New Roman",serif"> </span><u></u><u></u></p>
<div>
<div style="border-right:none;border-bottom:none;border-left:none;border-top:1pt solid rgb(225,225,225);padding:3pt 0in 0in">
<p class="MsoNormal"><b>From:</b> <a href="mailto:wsbapt-bounces@lists.wsbarppt.com" target="_blank">
wsbapt-bounces@lists.wsbarppt.com</a> <<a href="mailto:wsbapt-bounces@lists.wsbarppt.com" target="_blank">wsbapt-bounces@lists.wsbarppt.com</a>>
<b>On Behalf Of </b>Joshua McKarcher<br>
<b>Sent:</b> Thursday, June 23, 2022 5:49 PM<br>
<b>To:</b> WSBA Probate & Trust Listserv <<a href="mailto:wsbapt@lists.wsbarppt.com" target="_blank">wsbapt@lists.wsbarppt.com</a>><br>
<b>Subject:</b> Re: [WSBAPT] Valuation of Property: List Price vs. Net Proceeds?<u></u><u></u></p>
</div>
</div>
<p class="MsoNormal"> <u></u><u></u></p>
<p class="MsoNormal"><span style="font-size:12pt;font-family:"Times New Roman",serif">Excellent, Bruce, and “Oops, Josh.” I made an assumption I should not have: I took Brent’s price if “listed for sale on the open market, regardless of commissions, fees,
taxes - that would be subtracted” to mean the <u>resulting gross sale price</u> arising from negotiations on that listing between arm’s length seller/buyer neither with any desperation to buy/sell, etc.
</span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-size:12pt;font-family:"Times New Roman",serif"> </span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-size:12pt;font-family:"Times New Roman",serif">I did
<u>not</u> mean any tax agency would accept a bare “listing price” without more – my apologies on that one.</span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-size:12pt;font-family:"Times New Roman",serif"> </span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-size:12pt;font-family:"Times New Roman",serif">Bruce, I certainly understand it as you have described it, yes. Thanks for the excellent clarification. Best, Josh</span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-size:12pt;font-family:"Times New Roman",serif"> </span><u></u><u></u></p>
<div>
<div style="border-right:none;border-bottom:none;border-left:none;border-top:1pt solid rgb(225,225,225);padding:3pt 0in 0in">
<p class="MsoNormal"><b>From:</b> <a href="mailto:wsbapt-bounces@lists.wsbarppt.com" target="_blank">
wsbapt-bounces@lists.wsbarppt.com</a> <<a href="mailto:wsbapt-bounces@lists.wsbarppt.com" target="_blank">wsbapt-bounces@lists.wsbarppt.com</a>>
<b>On Behalf Of </b>Bruce Moen<br>
<b>Sent:</b> Thursday, June 23, 2022 6:32 PM<br>
<b>To:</b> WSBA Probate & Trust Listserv <<a href="mailto:wsbapt@lists.wsbarppt.com" target="_blank">wsbapt@lists.wsbarppt.com</a>><br>
<b>Subject:</b> Re: [WSBAPT] Valuation of Property: List Price vs. Net Proceeds?<u></u><u></u></p>
</div>
</div>
<p class="MsoNormal"> <u></u><u></u></p>
<p class="MsoNormal">I think neither. Allard v Pacific Bank says to test the market by listing or an independent appraisal.<u></u><u></u></p>
<p class="MsoNormal"> <u></u><u></u></p>
<p class="MsoNormal">I understand the fmv to be the gross sales price after listing the sale to the public (or an appraisal -not a realtors opinion letter). Not the net proceeds and not the listing price.<u></u><u></u></p>
<p class="MsoNormal"> <u></u><u></u></p>
<p class="MsoNormal">Anyone have a different understanding or authority?<u></u><u></u></p>
<p class="MsoNormal"> <u></u><u></u></p>
<p class="MsoNormal"> Bruce Moen<u></u><u></u></p>
<p class="MsoNormal"> <u></u><u></u></p>
<div>
<div style="border-right:none;border-bottom:none;border-left:none;border-top:1pt solid rgb(225,225,225);padding:3pt 0in 0in">
<p class="MsoNormal"><b>From:</b> <a href="mailto:wsbapt-bounces@lists.wsbarppt.com" target="_blank">
wsbapt-bounces@lists.wsbarppt.com</a> <<a href="mailto:wsbapt-bounces@lists.wsbarppt.com" target="_blank">wsbapt-bounces@lists.wsbarppt.com</a>>
<b>On Behalf Of </b>Joshua McKarcher<br>
<b>Sent:</b> Thursday, June 23, 2022 3:47 PM<br>
<b>To:</b> WSBA Probate & Trust Listserv <<a href="mailto:wsbapt@lists.wsbarppt.com" target="_blank">wsbapt@lists.wsbarppt.com</a>><br>
<b>Subject:</b> Re: [WSBAPT] Valuation of Property: List Price vs. Net Proceeds?<u></u><u></u></p>
</div>
</div>
<p class="MsoNormal"> <u></u><u></u></p>
<p class="MsoNormal"><span style="font-size:12pt;font-family:"Times New Roman",serif">I’m with you, and I think tax agencies would be if a taxable estate. There is something missing here: why does the distinction matter? And why would she want to ‘list’ it
this way? Any chance the buyer is a related party to her or something? </span><u></u><u></u></p>
<p class="MsoNormal"><span style="font-size:12pt;font-family:"Times New Roman",serif"> </span><u></u><u></u></p>
<div style="border-right:none;border-bottom:none;border-left:none;border-top:1pt solid rgb(225,225,225);padding:3pt 0in 0in">
<p class="MsoNormal"><b>From:</b> <a href="mailto:wsbapt-bounces@lists.wsbarppt.com" target="_blank">
wsbapt-bounces@lists.wsbarppt.com</a> <<a href="mailto:wsbapt-bounces@lists.wsbarppt.com" target="_blank">wsbapt-bounces@lists.wsbarppt.com</a>>
<b>On Behalf Of </b>Brent Williams-Ruth<br>
<b>Sent:</b> Thursday, June 23, 2022 4:17 PM<br>
<b>To:</b> WSBA Probate & Trust Listserv <<a href="mailto:WSBAPT@lists.wsbarppt.com" target="_blank">WSBAPT@lists.wsbarppt.com</a>><br>
<b>Subject:</b> [WSBAPT] Valuation of Property: List Price vs. Net Proceeds?<u></u><u></u></p>
</div>
<p class="MsoNormal"> <u></u><u></u></p>
<div>
<div>
<p class="MsoNormal"><span style="font-family:Arial,sans-serif">Mighty Brain Trust - </span><u></u><u></u></p>
</div>
<div>
<p class="MsoNormal"><span style="font-family:Arial,sans-serif"> </span><u></u><u></u></p>
</div>
<div>
<p class="MsoNormal"><span style="font-family:Arial,sans-serif">Decedent passed owning a mobile home. There is a person who wants to purchase said mobile home. Executor obtained a market valuation but then said that the value would be less because it's a
private sale and won't need to use a real estate agent (thus no commissions). </span><u></u><u></u></p>
</div>
<div>
<p class="MsoNormal"><span style="font-family:Arial,sans-serif"> </span><u></u><u></u></p>
</div>
<div>
<p class="MsoNormal"><span style="font-family:Arial,sans-serif">She wants to officially list the market value as being this lower figure. </span><u></u><u></u></p>
</div>
<div>
<p class="MsoNormal"><span style="font-family:Arial,sans-serif"> </span><u></u><u></u></p>
</div>
<div>
<p class="MsoNormal"><span style="font-family:Arial,sans-serif">Has anyone had ever dealt with this? To me, market value is what it would be listed at if listed for sale on the open market, regardless of commissions, fees, taxes - that would be subtracted.
To me, it wasn't about the net amount that would come after a sale but the list price. </span><u></u><u></u></p>
</div>
<div>
<p class="MsoNormal"><span style="font-family:Arial,sans-serif"> </span><u></u><u></u></p>
</div>
<div>
<p class="MsoNormal"><span style="font-family:Arial,sans-serif">The statute does not seem to help and I am not finding case law that is on point with my thoughts. </span><u></u><u></u></p>
</div>
<div>
<p class="MsoNormal"><span style="font-family:Arial,sans-serif"> </span><u></u><u></u></p>
</div>
<div>
<p class="MsoNormal"><span style="font-family:Arial,sans-serif">Appreciate insights. </span><u></u><u></u></p>
</div>
<div>
<p class="MsoNormal"><span style="font-family:Arial,sans-serif"> </span><u></u><u></u></p>
</div>
<div>
<p class="MsoNormal"><span style="font-family:Arial,sans-serif">Thank you!</span><u></u><u></u></p>
</div>
<div>
<div>
<div>
<div>
<p><b><span style="font-family:"Times New Roman",serif">Brent Williams-Ruth</span></b><span style="font-family:"Times New Roman",serif"> (pronouns: he/him)<br>
<i>Attorney-At-Law</i></span><u></u><u></u></p>
<p><b><span style="font-family:"Times New Roman",serif">Law Offices of Brent Williams-Ruth, </span></b><b><span style="font-size:7.5pt;font-family:"Times New Roman",serif">a division of BWR Consulting, PLLC</span></b><u></u><u></u></p>
<p><b><span style="font-family:"Times New Roman",serif">Physical Address: 500 S 336th Street, Suite 214; Federal Way, WA 98003</span></b><u></u><u></u></p>
<p><b><span style="font-family:"Times New Roman",serif;color:red">**EFFECTIVE IMMEDIATELY**</span></b><b><span style="font-family:"Times New Roman",serif"> All mail sent through the USPS should be sent to the following address: PO BOX 3319; Federal Way, WA
98063 </span></b><u></u><u></u></p>
<p><span style="font-family:"Times New Roman",serif">Office/Scheduling Phone:<span style="color:rgb(0,64,128)"> </span><span style="color:red">(253) 285-7751</span></span><u></u><u></u></p>
<p><span style="font-family:"Times New Roman",serif">Direct:<span style="color:red"> (253) 285-7453</span></span><u></u><u></u></p>
<p><span style="font-family:"Times New Roman",serif"><a href="mailto:Brent@Williams-RuthLaw.com" target="_blank">e-mail</a> / <a href="https://nam11.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.williams-ruthlaw.com%2F&data=05%7C01%7Cpjones%40duffykekel.com%7C4f5b1f558744418de0b808da557ba820%7C2d66ed5354fa4c2f8c4dbff1aca5479d%7C0%7C0%7C637916286855861900%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=It6%2FHJl3KS4YJ2%2B96KASRMA4ccXt2%2FfUnz25k%2B3cj8s%3D&reserved=0" target="_blank">website</a> /</span><span style="font-size:9.5pt;font-family:"Times New Roman",serif"> </span><span style="font-family:"Times New Roman",serif"><a href="https://nam11.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.facebook.com%2Fbwrlaw&data=05%7C01%7Cpjones%40duffykekel.com%7C4f5b1f558744418de0b808da557ba820%7C2d66ed5354fa4c2f8c4dbff1aca5479d%7C0%7C0%7C637916286855861900%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=gglOK8X%2FmLz%2BhdrfH3VaxH35%2Fimz9Pk9uVVWw2NE8Sc%3D&reserved=0" target="_blank"><span style="font-size:9.5pt">facebook</span></a></span><span style="font-size:9.5pt;font-family:"Times New Roman",serif"> / </span><u></u><u></u></p>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
***Disclaimer: Please note that RPPT listserv participation is not restricted to practicing attorneys and may include non-practicing attorneys, law students, professionals working in related fields, and others.***<br>
_______________________________________________<br>
WSBAPT mailing list<br>
<a href="mailto:WSBAPT@lists.wsbarppt.com" target="_blank">WSBAPT@lists.wsbarppt.com</a><br>
<a href="http://mailman.fsr.com/mailman/listinfo/wsbapt" rel="noreferrer" target="_blank">http://mailman.fsr.com/mailman/listinfo/wsbapt</a></blockquote></div>