In 2013 my mother passed away leaving her home. In conjunction with a local realtor, though without a formal appraisal, we established the market value of the property to be $200,000, and have had it listed. It remains unsold.
The house was a double wide trailer house, originally bought in the mid-1980s for $25,000. The current county property tax appraisal on the house is $21,000. I recently listed the trailer house for sale separately, without the land, with an asking price of $20,000.
I sold house for 12,000, which is to be paid according to the following schedule:
$6,000 now. $2000 per year in 2015, 2016, 2017.
In accordance with IRS Publication 523, and the worksheets therein, I will establish the basis of the house at its tax valuation of $21000. The sale at $12,000 therefore produces a $9,000 loss to be reported on Schedule D of the 2014 tax return.
Several related questions.
- Is the above the correct way to establish and account for the proceeds of this sale?
- Should the entire sale be reported and accounted for on the 2014 Form 1041 ( Estate Tax Return)? Or should only the $6,000 received now be accounted for on the 2014 return, and the $2,000 received in 2015, 2016, 2017 be accounted for on the Estate Tax Returns for those years?
What IRS publication covers accounting and reporting proceeds for sales made this year, but paid over several future years?