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Hello:
Mom dies. 100% of Residence goes into bypass trust. Dad lives there, then passes. House sold for a loss, using Mom's DOD FMV.
Do the kids, the beneficiaries, get a capital loss on the sale of the house?
I heard an argument that this property is a personal residence where: a) loss disallowed because used as dads primary residence, or b) Property converted to investment property at dad's death, requiring a lower of Moms stepped up basis or FMV at deads death due to conversion from residence to investment property.
I disagree with both, and believe the kids get a capital loss on their bypass k1s. Yes or no?
Thank you
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Member
 
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Last Login: 1/3/2012 10:46:42 AM
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Well, IMO, I agree with both a) and b), meaning no loss on sale now, because it was personal use when the property declined in value, and if converted instead of sold, you would use the current, lower value for depreciation.
Bill Downs
Anonymous (8/26/2011)
Hello:
Mom dies. 100% of Residence goes into bypass trust. Dad lives there, then passes. House sold for a loss, using Mom's DOD FMV.
Do the kids, the beneficiaries, get a capital loss on the sale of the house?
I heard an argument that this property is a personal residence where: a) loss disallowed because used as dads primary residence, or b) Property converted to investment property at dad's death, requiring a lower of Moms stepped up basis or FMV at deads death due to conversion from residence to investment property.
I disagree with both, and believe the kids get a capital loss on their bypass k1s. Yes or no?
Thank you
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Member
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Last Login: 12/2/2011 3:36:57 AM
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No I don't agree if the decision was made by parents then would kids suffer for loss.
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Member
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Last Login: 12/22/2011 1:20:45 AM
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No I dont think so it will be loss, b property is true, if you invest it, then it is going to be help kids when they grow up!!!
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Member
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Last Login: 12/27/2011 12:45:30 AM
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You can go to the court and get the information whether the property belongs to you after your parents rather than creating your own confusion you will definitely get some help from there.
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Member
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