Loss on a Sale of a Home in a Trust

Forum|Forum|10 months ago
May 12, 2025
1 reply
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My father passed away in September 2024. His house was appraised for $450,000. We are in a down market now in Florida. Houses in the area on his street are now going for $390,000. If in 2025 I sold it for $390,000 and let’s say after expenses like paying a real estate agent the amount netted and distributed to the 4 Beneficiaries was $375,000 divided equally by 4 can the $75,000 (divided by 4) loss also be distributed on their 2025 taxes? Thanks!

Opus 17

Employee

First, it needs to be an appraisal that reflects the market value on the date he died.

Second, you would distribute the loss regardless. The real question is, is it a deductible loss to the beneficiaries.

Most experts on this board would say that as long as a particular beneficiary did not have any personal use of the property after he died, they can report the sale as investment property and claim a capital loss against any capital gains. Anyone who has personal use of the property can't deduct the loss, because losses on personal property are not deductible.

M-MTax

In another post, you indicated that the property was being rented out.

If that's so, then any net loss on the sale of that rental property to an unrelated third party would be an ordinary loss that would be distributed to the beneficiaries as such.

@trust812

trust812Author

It’s not being rented out yet. I am considering it. I changed my post to be more clear to say “if it is rented out”. Thanks for bringing this to my attention and your answer to my question!