estate basis question - my brain is muddled

[schirallicpa]

Maybe I'm just more muddled because this is an estate of a good friend who died last year. 

His land and farm equipment was still is his name - never changed ownership to put his wife on the deed before he died.

So when she was able to sell this land, it was technically the estate selling this land.  And tractor.

The land was sold at 34K and the tractor at 16K.  The tractor had been used as an asset on the farm, was fully depreciated, and would have created a 4797 upon sale if the sale had taken place on his 1040.  

Is the basis in both of these FMV on the estate return?  (Sales were both within weeks after DOD so no FMV variation from time of death)

 

 

[Burke]

Yes, his estate got stepped up basis.  

[Burke]

(Sorry, I cannot figure out how to edit my posts.)  Are you asking if an estate tax return has to be filed to report these items? 

[schirallicpa]

you confirmed what I needed to know.  I was hung up on the fact that the tractor would have been shown as a income on 4797 on his personal but the estate takes it at the FMV.  

Thanks!

 

[jasdlm]

How is your daughter?  I've been thinking about her and keeping her in my prayers.  My son has Celiac, so I understand the autoimmune concerns!

[schirallicpa]

Thank you for asking.  Our prayers have been successful!!

She has recovered quite well.  Her closet friend also got sick and they have been holed up together.  They both have lost their sense of taste and smell.  But thank the Lord above they are both okay.  

It's quite frightful.  She's had Type 1 since she was 7.  Then Celiac.  Then eating disorder.  Then Graves disease.  So every little thing that comes along keeps me worried.  

Thank you again for your prayers.

 

[DANRVAN]

1 hour ago, schirallicpa said:

I was hung up on the fact that the tractor would have been shown as a income on 4797 on his personal but the estate takes it at the FMV.  

Is it actually going through an estate or reported on the final joint return by surviving spouse?

[schirallicpa]

going thru the estate.  

[Abby Normal]

Turned out to be a good move to not have her name on anything so all of the land got a step up in basis, not just half of the land. It might be different in community property states.

[schirallicpa]

Once in a while things work in our favor in this crazy tax system.  Good news for her to not have tax on any of it.  

Thank you everyone for this terrific forum