Sale of Personal Property On Form 1041

[KMACK]

I am working on a 1041 estate tax return where the trustee hired a company to do an estate sale and sell all of the personal property of the deceased (i.e. clothing, furniture, appliances, etc.).  The estate sale company charged a fee equal to 35% of the sales proceeds.  I assume the income from the sale of the personal property should be reported on schedule D with the basis being roughly the FMV of the items sold.  However, if I do this I end up with a loss on the sale approximately equal to the fee charged by the estate sale company.  Since this is the sale of personal property how do I record it in ProSeries so the loss does not end up as a deductible loss on K-1 and to the beneficiary?

Thank you.

[BobKamman · Accepted solution]

Why is it not deductible, has the beneficiary been wearing the clothes and sleeping on the sofa?  You can show the selling costs on Schedule D, the same as you would with the sale of a house, or you can claim them as a deduction along with fiduciary fees, attorney fees and other expenses.  "Personal property" is anything that is not real estate.  Stocks and bonds are personal property, they're just not tangibles.  The fact that it was once used personally by the decedent is irrelevant.