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Loss on personal residence after grantor dies

JoJo23
Level 1

Grantor's personal residence held in living trust.  Grantor dies, and receives basis step up.  There is no gain just losses for selling costs.  My understanding is that it is considered a personal loss and thus no loss in the trust to carryover or pass out. 

 

I have recently read otherwise, and that it is a capital asset in the trust and thus if sold a few months later would generate a capital loss within the trust.  

 

Trying to find authority and discussion within CCH and it implies that unless it is converted to a rental within the trust --it would remain a non deductible loss.

0 Cheers
4 Comments 4
IRonMaN
Level 15

I don't do research for other folks, but for what it is worth, that question has been asked a number of times over the years here.  The general consensus of the smart folks here (along with a few of us dumb ones) is you have a deductible capital loss in that situation.


Slava Ukraini!
sjrcpa
Level 15

It is not a personal residence of the trust. 

As long as no one else lived in it as a personal residence after the death, it is "held for investment" and generates a capital loss.

The more I know, the more I don't know.
BobKamman
Level 15

But we always have time for newcomers who show up out of nowhere and ask philosophical questions with no actual facts or citations to what they have been reading.  It's sort of like going to a Q-Anon meeting, isn't it?

JoJo23
Level 1

Thank you all for input.