I filed the initial inventory on old forms before April 15th, 2001. Since the old forms did not require a true estate value (assets liabilities) for the ending balance how do I record the sell of an asset with a liability?
When the old forms are used and there is a liability, which was listed but not included, in the net assets (the liabilities were not subtracted from the assets),list the gain of the sale on schedule C in the amount of the realized cash rather than the true gain to create a balanced summary. Ex: The home was listed on the initial inventory at FMV of $84,000.00 and even though there is a mortgage the beginning balance of the next accounting does not take it into consideration. So you sell the home for $100,000.00. Normally you would take a gain of $16,000.00 but to make up for the lack of mortgage list the gain at the amount you made from the sale of the house. If you realized $20,000 of cash from the sale list this as a gain on schedule C.
Related Questions
- I filed the initial inventory on old forms before April 15th, 2001. Since the old forms did not require a true estate value (assets liabilities) for the ending balance how do I record the sell of an asset with a liability?
- Under the MPC must the estate inventory and account be filed for public record?
- What forms are required to be filed by an estate or trust?
