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Thread: What happens to loss?

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  1. #4
    Join Date
    Jan 2008


    You call this a real estate vacation home, but you don't say whether it was for personal use or whether it was rental property. It got a stepped up basis in 2004 when grantor died. That was more than 13 years ago. What happened after that? Was it rented out or used for personal use? If it was not rental property after 2004, then there is no loss to be deducted. Just because it is in a trust does not change the character of its usage or generate a loss (unless it was sold shortly after death of the grantor.) If the beneficiaries disclaim their interest in the trust, then what does the trust document say about contingent benes? If nothing, ownership goes to their heirs, not the spouse, unless he is also named as a beneficiary. Still, no loss passes through for personal use property.

    The property can be sold and the trust terminated if it had title to no other assets, as you say, easily enough if all benes agree. If this WERE rental property after 2004, then that is another matter and a loss might be deducted. The trust became irrevocable at death of the grantor in 2004. After that, it could not be changed, although you mention "modification of the trust document." When was it "modified.?"
    Last edited by Burke; 05-26-2018 at 12:57 PM.

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