Q: The county valued the house at $131,100 and it sold for $129,900. Doesn’t this count as a loss and therefore not income? (West Mifflin, PA)
A: Form 1099-S is used to report gross proceeds from the sale and exchange of real estate and certain royalty payments. A 1099-S form must be provided to the recipient and a copy mailed or emailed to the IRS. Just as you would list it and attach it to a personal return, you use it on the 1041 Schedule D (decedent’s fiduciary return). You will list the stepped-up value of the house based on what the fair market value was at death. So, if you sell it within in a year of your mother’s death, it is doubtful there will much of a capital gain or loss. There are other factors needed to be known here before I could conclude that the estate will not face a capital gain. It is also relevant as to whether you received the house as a beneficiary, or sold it from the estate as executor. I would suggest that you consult with an estate attorney.