Wife passes away 2007 and husband and children create trust for land owned by husband. Five years later husband passes and children now want to sell land. The land is titled in the name of the trust. Would basis be FMV date of death of wife(2007) and reportable on 1041 schedule D?
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Was it an irrevocable trust while the husband was living?
If so, the answer would be yes. If not, it would be the the FMV at death of husband.Evan Appelman, EA -
Irrevocable
Yes, it was irrevocable. Thanks for your help.Comment
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You didn't say how the property was owned while the wife was still alive, but assuming it was owned equally by husband and wife, then the basis would depend on whether they're in a community property state. If they are, then yes, it's the FMV at the wife's death, but if not, then it's half their original basis plus half the FMV at the wife's death.Comment
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Good point.
And if it was owned by the husband as separate property or in a non-community property state, it would be the husband's basis.Evan Appelman, EAComment
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