Need advice regarding trusts and home sales

[abomb]

Does anyone have any information on the tax implications of selling a home that is part of a trust? Short story is that my late grandmother and father had a trust together that included my grandmother's long-paid-off house.

My dad spoke to his financial advisor and was told that any proceeds from the sale of the house would not be taxed and neither would any monies he gifted to my brother and me, as long as he didnt exceed the IRS limit of $12,500 per person per year.

If anyone has any info, or has gone through this before, your help would be greatly appreciated.

 

[dreamcastrocks]

Next tailgate on abomb...

 

[Shane]

Pay up dreamy!

 

[dreamcastrocks]

3M and you still want my money.

Damn.

 

[Shane]

3M and you still want my money.

Damn.

Hell yes. A bets a bet!

Oh and Im sure I will be donating a fair share of it back to you at some point in time.

 

[dreamcastrocks]

Hell yes. A bets a bet!

Oh and Im sure I will be donating a fair share of it back to you at some point in time.

I always pay back my bets. It's all good. I'll get it back.

I told abomb at the game that it was the best 85k I spent on that DRC pick 6.

 

[abomb]

If only my real $ were in line with my A$FN.

 

[earthsci]

Does anyone have any information on the tax implications of selling a home that is part of a trust? Short story is that my late grandmother and father had a trust together that included my grandmother's long-paid-off house.

My dad spoke to his financial advisor and was told that any proceeds from the sale of the house would not be taxed and neither would any monies he gifted to my brother and me, as long as he didnt exceed the IRS limit of $12,500 per person per year.

If anyone has any info, or has gone through this before, your help would be greatly appreciated.

I'll talk to my wife and see if she can help you. She works for a credit union where she writes trusts.

 

[earthsci]

From my wife. -

That sounds right to me as long as the beneficiary is his dad and then
his dad, in turn, gifts that money. The other thing is he should check
into the tax basis for the home which is determined by the title of the
home and whether it was joint tenants or tenants in common with the
grandmother; there is a "stepped up" tax basis that can use either the
date of her death or the date she put him on as co-owner that could make
a substantial difference.

Once that is determined the gift to the sons is defined by the IRS regs
which I thought was 12k p/p for 2008; he should double ck the figure he
was given.

He should speak with a CPA and not just an investment advisor.

 

[Brianellsworth]

From my wife. -

That sounds right to me as long as the beneficiary is his dad and then
his dad, in turn, gifts that money. The other thing is he should check
into the tax basis for the home which is determined by the title of the
home and whether it was joint tenants or tenants in common with the
grandmother; there is a "stepped up" tax basis that can use either the
date of her death or the date she put him on as co-owner that could make
a substantial difference.

Once that is determined the gift to the sons is defined by the IRS regs
which I thought was 12k p/p for 2008; he should double ck the figure he
was given.

He should speak with a CPA and not just an investment advisor.

Not a big deal but the amount you are able to give as a gift without paying gift tax is $12,500 for 2008. Probably doesn't make a difference but FYI.

 

[CardinalsFan11]

I'm going to overlook the fact you didn't ask me these questions...I mean, why would you ask the guy getting a masters in taxation a tax question?

So I'll try to answer your question as best I can.
1) Your dad should have to pay no tax on the sale of the house as the basis of the home is "stepped up" at the date of your grandmothers death.

2) The financial advisor sounds right on the annual gift amount. Section 2503(b) of the IRC exempts gifts up to 12,500 per recipient...But if you want to get the most bang for your buck, try to do gift splitting, where your mom and dad combine their annual gift exemption and you can get 25k in gifts tax free per recipient.

Obviously, I'm not sure what the trust situation is and that could have an impact on the tax implications, but on a simple level you should be able to get money from this tax free. Also, I'm obv not a tax professional or cpa or anything. So just remember that if you take my advice and lose the audit lottery.

 

[abomb]

Thanks to all who helped answer!

I'm going to overlook the fact you didn't ask me these questions...I mean, why would you ask the guy getting a masters in taxation a tax question?

So I'll try to answer your question as best I can.
1) Your dad should have to pay no tax on the sale of the house as the basis of the home is "stepped up" at the date of your grandmothers death.

2) The financial advisor sounds right on the annual gift amount. Section 2503(b) of the IRC exempts gifts up to 12,500 per recipient...But if you want to get the most bang for your buck, try to do gift splitting, where your mom and dad combine their annual gift exemption and you can get 25k in gifts tax free per recipient.

Obviously, I'm not sure what the trust situation is and that could have an impact on the tax implications, but on a simple level you should be able to get money from this tax free. Also, I'm obv not a tax professional or cpa or anything. So just remember that if you take my advice and lose the audit lottery.

Ha ha. I think I forgot you because when this issue originally came up in February, I didnt know you very well.

My brain works weird and I never made the connection.

Now, since we are BFFs by marriage, you may even get to help me with my taxes.

 

[CardinalsFan11]

Thanks to all who helped answer!

Ha ha. I think I forgot you because when this issue originally came up in February, I didnt know you very well.

My brain works weird and I never made the connection.

Now, since we are BFFs by marriage, you may even get to help me with my taxes.

Excellent, I love me some tax returns