Client stated home is in a Trust with an ID Number.
What type of trust was it? Crucial to know. Get a copy of the trust document and read it.
Apparently, no other assets in Trust and no 1041 was ever filed.
A trust only requires a Form 1041 when there is gross income of $600 or more or any amount of taxable income in any calendar year. Since your post says there was zero income, no filings were required in prior years.
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You are required to obtain a new EIN if the trust was a grantor revocable trust witch at death becomes a nonrevocable, and file a 1041. You will use section 121 for the home
On the death of the grantor, the trust continues uninterrupted, meaning the assets titled in the name of the trust are unaffected (though still subject to the terms of the trust) and will not require probate. However, for income tax purposes, the trust will now be considered a separate taxpayer and will be required to obtain a TIN, even in instances where the trust obtained a separate TIN during the grantor's life (Regs. Sec. 301.6109-1(a)(3)(i)(A)).
See link for more info. https://www.thetaxadviser.com/newsle...ors-death.htmlLeave a comment:
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Is Trust Return necessary
Client's mother passed away at 96. In Nursing home for 6 months. Prior to that lived in main home for decades.
Client stated home is in a Trust with an ID Number. Home was vacant for the 6 months. No rental, etc.
Client is in charge of Trust and has passed out to 3 siblings the proceeds. Wants to know tax consequences, if any.
And so do I. Apparently, no other assets in Trust and no 1041 was ever filed. I now presume the a 1099-S will be prepared
by the Escrow Agent. Question is do I file a 1041 AND does Section 121 I believe exempt the presumed gain?
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