Capital Gain/Loss Question
I’m the executor of my mother in law’s estate in NC. She left 4 children that will divide the proceeds of her estate. The only asset is her home. I had an appraisal done shortly after her death. The home appraised for $180,000. We used that amount on our 90 day inventory. The home needs a lot of work and after several offers it was ultimately sold for $150,000. After paying off the mortgage of $50,000 each of the four adult children will receive approximately $25,000 each. It is my understanding that for purposes of capital gains taxes the basis number would be the appraisal at the time of her death which was the $180,000. Given this, is it correct that they will owe no capital gains taxes and will not be required to report any of the $25,000 as income. Is this correct? Second question: Would the $30,000 loss based up the house selling for only $150,000 result in each child being able to take a $7,500 loss on their taxes? ($30,000 divided by 4 = $7,500)
Thanks in advance for your help.