A loss claim stands on three records: the value on the date of death, the sale figures, and proof the house was held to sell or rent. In DFW, the probate inventory filed with the county clerk often holds the first; appraisal district values are a January 1 tax figure, not a substitute.
The rules on when a loss counts are in our Texas guide to capital losses on inherited property. In short, the IRS allows a loss only on a house held for investment or rental, never on one kept for personal use. This page is about proof. A CPA cannot claim a loss for a DFW heir without three sets of records, and each one lives in a specific local office or document.
The three records behind any loss claim
- Basis. The house's fair market value on the date of death. IRS Publication 551 defines fair market value as the price a willing buyer and willing seller would agree on, neither forced to act and both reasonably informed.
- Amount realized. The contract price less your selling expenses, taken from the closing statement.
- Use after death. Evidence that the estate or heirs held the house to sell or to rent, rather than letting a family member live there.
Missing any of the three leaves the loss hard to defend. Here is where each comes from in Tarrant, Dallas, Collin and Denton counties.
Date-of-death value: start with the probate inventory
When a court appoints an executor or administrator, Texas requires a sworn inventory. Under Estates Code Sec. 309.051, the representative files it with the court clerk before the 91st day after qualifying, unless the court allows more time. It must list the estate's Texas real estate and set out the fair market value of each item on the date of death, either as the representative's own appraisement or with help from a court-appointed appraiser. Once approved, it is the estate's official inventory and appraisement.
- Tarrant County. The County Clerk's January 2026 probate schedule lists $27 to file an inventory, including the judge's fee.
- Dallas County. The Probate Courts Division sits in the George Allen Courts Building, 600 Commerce Street, 7th Floor, and its web pages link a probate case search.
- Collin County. The clerk says the probate judge cannot appoint an executor or administrator who is not represented by a licensed attorney, so ask the estate's lawyer for a copy of the inventory.
- Denton County. The probate court's written policy for estates without a will has consenting heirs in an independent administration agree that nothing more happens in court except the return of an inventory and related filings, so look for one in the case file.
No inventory on file? An independent executor may file an affidavit in lieu of the inventory once debts other than secured debts, taxes and administration expenses are paid (Sec. 309.056). Beneficiaries generally receive the full inventory directly, and anyone interested in the estate may ask the executor for a copy in writing. If no probate was opened at all, there is no inventory; ask your CPA whether to order an appraisal as of the date of death.
An inventory value is strong evidence, but it is not automatically your tax basis. Ask your CPA whether it meets the IRS standard or whether a separate appraisal is worth ordering.
Appraisal district values: useful, but not the same number
Heirs often pull up the parent's account on the appraisal district site and treat that figure as the value at death. Be careful. Tax Code Sec. 23.01 sets appraised value at market value as of January 1, not on the date someone died. On a homestead, Sec. 23.23 can also cap the taxable appraised value below market value, and the district's records carry both numbers. The capped figure is a tax limit, not evidence of what the house would sell for.
DFW appraisal districts: Tarrant Appraisal District · Dallas Central Appraisal District · Collin Central Appraisal District · Denton Central Appraisal District
The appraisal district's market value is still a handy cross-check. If it differs sharply from your date-of-death figure, write down why, such as repairs, condition or a sale nearby.
Reading a DFW closing statement for selling expenses
Your amount realized comes from the settlement statement. IRS Publication 523 treats these as selling expenses that reduce it:
- sales commissions, such as a real estate agent's fee;
- advertising fees;
- legal fees;
- loan charges you paid that would normally fall on the buyer;
- other costs of selling, including transfer taxes and similar fees you paid as the seller.
After closing, the person responsible for the closing generally sends a Form 1099-S showing gross proceeds in box 2, according to Publication 544. Keep it with the settlement statement, because the two should agree.
Proving how the house was used
Publication 559 says an estate that intends to realize a house's value through a sale holds it as an investment, even if no one rented it. If instead a relative lived there rent-free and the house was later sold, a loss is not deductible. Records that help show intent include:
- a listing agreement or dated offers;
- utility bills showing the house sat empty, or a lease and rent deposits if it was rented;
- letters from the executor about selling;
- a homestead exemption filing, which cuts the other way if an heir claimed the house as home.
One more local caution: if a sibling is buying the house, Publication 544 makes a loss on a sale between related persons nondeductible. That rule applies in a Tarrant County buyout just as anywhere else.
A packet to hand your CPA
- The death certificate and the date of death.
- The probate inventory, affidavit in lieu, or date-of-death appraisal.
- The appraisal district's account history for the year of death.
- The final closing statement and Form 1099-S.
- Receipts for any selling costs paid outside closing.
- Proof of how the house was used between the death and the sale.
When we buy your inherited DFW house
Cash Home Advisors is based in Fort Worth and buys houses across DFW. We pay all closing costs, can close in 7–14 days, and you review the closing statement before you sign, so the sale figures your CPA needs are on one page.
Request a cash offer, see our service areas, or visit our Fort Worth and Dallas pages. For the property tax side, read our DFW guide to inherited property taxes.
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Frequently asked questions
Can I use the TAD or DCAD value as my basis?
Use it with care. Tax Code Sec. 23.01 appraises property at market value as of January 1, while IRS Publication 551 sets an heir's basis at fair market value on the date of death. Unless the death was close to January 1, the dates do not match. Ask your CPA whether you need a date-of-death appraisal.
Where is the date-of-death value in a Tarrant County estate?
If an executor or administrator was appointed, Estates Code Sec. 309.051 requires an inventory listing the fair market value of each item on the date of death, filed with the court clerk before the 91st day after the representative qualifies. Tarrant County's January 2026 schedule lists a $27 inventory filing fee.
What if the independent executor filed an affidavit instead of an inventory?
Estates Code Sec. 309.056 lets an independent executor file an affidavit in lieu of the inventory when debts other than secured debts, taxes and administration expenses are paid. Beneficiaries generally receive the inventory directly, and any person interested in the estate can ask the executor in writing for a copy.
Which closing costs on a DFW settlement statement count as selling expenses?
IRS Publication 523 lists sales commissions, advertising fees, legal fees, loan charges you paid that would normally be the buyer's, and other costs of selling. It adds that transfer taxes and similar fees you pay as the seller can be treated as selling expenses.
Sources
- Texas Estates Code, Chapter 309 (Secs. 309.051 inventory and appraisement; 309.056 affidavit in lieu)
- Texas Tax Code, Chapter 23 (Sec. 23.01 January 1 market value; Sec. 23.23 homestead cap)
- Tarrant County Clerk, Probate fee schedule (effective January 1, 2026)
- Dallas County Clerk, Probate Courts Division: Know Before You Come
- Collin County Clerk, Probate
- IRS Publication 551, Basis of Assets (Inherited Property; fair market value)
- IRS Publication 523, Selling Your Home (selling expenses)
- IRS Publication 544, Sales and Other Dispositions of Assets (Form 1099-S; personal-use property; related persons)
- IRS Publication 559, Survivors, Executors, and Administrators (sale of decedent's residence)
- Denton County Probate Court, Policies and Positions: Decedent Died Without a Will (PDF)
General information, not legal or tax advice. Talk to a Texas attorney or CPA about your situation.