Deceased taxpayer

[kjm1059]

Hello,

My client is deceased, passing in 2022.  Subsequent to his passing, his personal residence was sold by the executor of his estate in 2022.   A 1099-S was generated under the Estate's TIN.  The Transferor's name is the name of the estate.

With that, how do I report the Sale of a Principal Residence (taxpayer eligible for the exclusion)?  Do I complete a Federal 1041 under the Estate's TIN?   Given that the 1099 is not under the taxpayer's SS#, I'm thinking I cannot report on a 1040.

Any assistance is very much appreciated.

[Camp1040 · Accepted solution]

Yes, if the 1041 is a  final return report the sale on the 1041 and issue K-1's to the beneficiaries showing any gain or loss, this all assumes their are not any other estate related transactions.

[kjm1059]

Thank you for your assistance.  Big help.

[mm1]

Understand that it is no longer a sale of a principal residence. It is just the estate selling the asset so it goes on Schedule D. The Estate got a stepped up basis to what the house was worth when the taxpayer died. If it was sold shortly after his/her death then the selling price is considered to be the fair market value. Therefore, you would have a loss on the sale equal to any fixup costs and any closing costs at sale. 

[Camp1040]

I would think Schedule D of form 1041, and since it is the final return the loss can be passed on via the K-1.

[mm1]

Correct!