I have an irrevocable family trust with the only assets in the trust are the residence and some land. The trust is administered by the person owning the real estate, upon death the trust is to terminate as soon as legally and reasonably practical. An alternate trustee has been named in the trust and is able to act. Can the real estate in the trust have a stepped-up basis?
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I've just done one of these. Land stepped up value should b e taken from a registered land assessor at the date of death of the person(s) in the trust. A real estate agent is NOT good for this purpose. I would suggest you contact the local county assessor and ask who to call. Good luck.
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Whoa!
"The trust is administered by the person owning the real estate..." What person and what real estate? Does the trust qualify as a grantor trust? If not, assets in the trust are owned by the trust, and their basis will not be affected by the death of the grantor, the trustee, the beneficiary, or anyone else!Evan Appelman, EAComment
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Since this is said to be an irrevocable trust, there will be no step up basis.You have the right to remain silent. Anything you say will be misquoted, then used against you.Comment
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Agree. You have made two opposing statements. The trust, if it is an irrevocable trust, now owns the property. It is not owned by "the person." Assuming the former owner of the real estate was the grantor of the trust, the trust will not be a disregarded entity as it is a trust where grantor has given up all rights of ownership of the property. No step-up in basis for "the person(s) in the trust." (Assume you mean the original grantor(s) or the bene(s). If the trust BOUGHT the property, its basis is its cost.Comment
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One caveat
An irrevocable trust can be a grantor trust. An example is the so-called "intentionally defective" grantor trust. In such case, the grantor is the owner, and step-up rules will apply.Evan Appelman, EAComment
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