K-1

[Selkirk]

I have a client that is a trustee of a grantor type revocable family trust. The clients father (the grantor) passed away last year and the only income of the trust was the sale of the fathers home. My question is- when is the basis of the home taken. From the creation of the trust, the date the father passed away, or when the father bought the home? The trust was created in 1994. The purpose of this is to create the K-1 for the trust.

Thank you,

Rog

[fliszt]

I'm not an expert in trusts/estates

by any imagination of the word. Are there heirs? Did the heirs sell the house after he passed? If they did then the selling price of the house is the cost/MV and will be reported on the 1041 and distributed to the heirs on the K1. That will be the stepped-up value. Does this answer your question?

[ChEAr$]

don't confuse

I have a client that is a trustee of a grantor type revocable family trust. The clients father (the grantor) passed away last year and the only income of the trust was the sale of the fathers home. My question is- when is the basis of the home taken. From the creation of the trust, the date the father passed away, or when the father bought the home? The trust was created in 1994. The purpose of this is to create the K-1 for the trust.

Thank you,

Rog

a trust with an estate. My question first would be "was the house placed within the trust
already?" Or was it not, and therefore an item of the estate?

Think about it.

[S T]

Grantor Revocable Trust

At death of the grantor, the property (if placed within the Trust) or a pour over will was present, would pass to the Trust and stepped up basis of fair market value as of date of death, would be assigned.

Sandy

[Selkirk]

K-1

Thanks to all that responded. We got through it. We used cost basis when the trust grantor passed away. After clean-up costs, the home was sold. The sale of the home was the only income of the trust.

Thanks again

Rog

[fliszt]

But remember

If the house was sold soon after the passing, cost and MV will be the same and there will be no reportable income. Perhaps some loss due to selling fees, clean-up costs, etc.

[Bees Knees]

Thanks to all that responded. We got through it. We used cost basis when the trust grantor passed away. After clean-up costs, the home was sold. The sale of the home was the only income of the trust.

Thanks again

Rog

You used the wrong basis.

All assets in a grantor revocable trust must be included in the gross estate of the decedent. All property included in the gross estate gets stepped up basis. Thus the cost basis of the house is stepped up to fair market value on the date of death.

[Burke]

You used the wrong basis.

All assets in a grantor revocable trust must be included in the gross estate of the decedent. All property included in the gross estate gets stepped up basis. Thus the cost basis of the house is stepped up to fair market value on the date of death.

Bees Knees is correct. A revocable living trust is a disregarded entity while the grantor is living and the house got a stepped up basis at his death. You use FMV not original cost.