My parents had a revokable trust. Both passed away in 2010. Making the trust irrevokable. They owned a home as their primary residence 7/2009 until their death in 12/2010. The home was in the trust
We finally sold the home in 2/2012 at a loss of 50,000
Is this loss deductible on 1041 schedule D?? I have been told 2 different things by two CPA 's. 1) it is not because it was personal use property 2) it is investment property and the loss is deductible
Thanks for any help

It is only considered investment property if neither you nor your parents lived in it.

Your parents lived in it, so it is PERSONAL property and the loss is NOT deductible,