real estate basis in a trust question

[bcdawg1]

any estate attorneys on the green screen? real estate in a trust am looking for how to establish basis. would the basis be the value when inherited by my father in the 70's or the value when the property was placed in the trust in the 90's?

thanks in advance for any help. anyone with experience?

[Shane]

Not enough info given to say. Is your dad still living? Did he maintain title in his name only after he inherited it, or was it owned jointly with his wife or anyone else at any point? Did he transfer title to a trust during his lifetime, or did it go into a trust at his death (if he is no longer living)?

[bcdawg1]

father is passed. title was put into the name of the trust when the trust established in the 90's. trust is named jointly with mom and dad. was originally revocable but am told it became irrevocable at time of his passing. property inherited in the 70's.

[Shane]

Did your mother pass away before your father died, or is she still living? I am assuming that she passed first, if the trust isn't revocable after your father's passing.

[Shane]

You'll need to talk to your CPA to nail it down. Depending on whether your parents' trust language, and/or how they held it prior to moving it into the trust (joint tenants in common OR joint tenants with rights of survivorship), the applicable step up in cost basis at the death of the first spouse would either be on the entire value of the real estate OR half of the real estate value.

[Landrover]

Good topic. Following as we are wanting to do the same with our place.

[powderburner]

We put everything in a revocable trust. The tax documents will show what type of trust it is in if they did the correct thing and have the trust registered. Some do not and it ends up in probate courts with a lawyer to get sorted out. We have cars and houses in the trust.

[Txhunter3000]

My lawyer made out Transfer on Death Deeds that were filed at the courthouse for our real estate. I only have 1 child so this was the easiest way for us.

[Shane]

We put everything in a revocable trust. The tax documents will show what type of trust it is in if they did the correct thing and have the trust registered. Some do not and it ends up in probate courts with a lawyer to get sorted out. We have cars and houses in the trust.

My lawyer made out Transfer on Death Deeds that were filed at the courthouse for our real estate. I only have 1 child so this was the easiest way for us.

Revocable living trusts and TODs can help deal with transferring property to beneficiaries without probate, but they don't change cost basis.

[Txhunter3000]

TODs have a step up in cost basis.

[60 Deluxe]

TODs have a step up in cost basis.

I used this in the past tax year. Dad had his investments under his name with a TOD to Mom. When he passed, the cost basis changed and I was able to do some changes without incurring much capital gains tax.

[BBBGP]

For inherited real estate, the cost basis is the fair market value (FMV) of the property on the date of the deceased owner's death, or the alternate valuation date if the executor of the estate elects to use it.

[Sticks&Strings]

Im no expert in this or the situation my wife's family is going through, but her parents put their home into a trust for my wife and her brother. The issue is, her mom has dementia. Supposedly now, they can't sell the home until their mom dies. She needs to be in a care facility, so we are looking into a corporate relocation rental pool. The bright side is it is a fairly expensive home on the golf course in the Woodlands. Otherwise it would be hard to rent. But paying taxes and maintenance on an empty home isn't ideal.

[Bill]

Following. If I bought a house for $10k, put it in a revocable trust five years later with a market value of $50k, and sold it five years later for $100k, how could the IRS allow a $50k cost basis since no tax was paid on the $40k capital gain when transferred into the trust? I'm just wondering.

[Quackerbox]

You'll need to talk to your CPA to nail it down. Depending on whether your parents' trust language, and/or how they held it prior to moving it into the trust (joint tenants in common OR joint tenants with rights of survivorship), the applicable step up in cost basis at the death of the first spouse would either be on the entire value of the real estate OR half of the real estate value.

A CPA or an attorney?

Im listed as the heir to all of one property with a home and half another property with a sibling (50 of 200ac) the other 100 goes to dad's sister