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I expect direct expenses for preparing for sale: new flooring, paint, masonery repair, cleaning, staging, trash removal, general repairs, required code upgrades, etc... and the costs of sale including real estate commissions and transfer taxes would be added to cost basis. What about the pro-rated property taxes paid in escrow, property taxes paid during probate, insurance during probate, and utilities during probate? Property is vacant during probate.

Property taxes, insurance and utilities are not added to the basis. You can see how to calculate basis of real property in IRS Pub 551

Property taxes paid by the estate to the taxing authority, or credited to the buyer on the closing statement when sold, are deductible on line 11 of the 1041. Property taxes in escrow are not deductible. Mortgage interest paid by the estate may be deductible on line 10, but only if the home is the secondary residence of the beneficiary. Insurance and utilities could only be deductible by the estate on Schedule E as rental expenses if the estate rents the property rather than sells it.

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