Question : My grandmom leaved a house for me under living trust after she passed away. How could I save captial gain tax?
Do I convert the title first before selling it? (how's the tax base calculation?) Or should I sell it under the trust( my aunts are the trustees)? Which tax base of selling title will be higher so that I can pay less capital gain? Thanks.Also my aunt is getting Federal Supplemental Security Income (SSI). She has no money interest (not a beneficiary) with the living trust. Does it hurt her SSI Status from being a trustee? Thanks.
- asked by EggshellHead
All Answers:
Answer #1
Your tax basis will be the house's value on thedate of your grandmother's death. It makes nodifference whether your aunts sell as the trusteesor whether they distribute the house to you andyou sell it. As your aunt is the trustee and nota beneficiary, her SSI should not be affected byher acting as trustee.
- answered by mattapan26
Answer #2
It would help if you stated the amount that youare going to sell the house for. I might bewrong, but I believe you are able to have capitalgains of $250,000 if you are single and $500,000if you are married from the sale of a home,without having to pay taxes. I think you can dothis every two years, (that is the part I amunsure of). Either way, depending on the amountyou will gain from the sale of the home, you maynot get hit hard. To make everything easier, Iwould transfer the title to yourself, that way,you don't have the complications when dealing witha trust. I can't comment on the SSI question. I don't know anything about that. Sorry.
- answered by Justaguess
Answer #3
Mattapan26 is correct. Justaguess is not correct- that exclusion from capital gains is availableonly if you live in the house as your main home,and own the house, for at least two full years ofthe five years immediately before the sale, and itdoesn't sound like that's the case here.
- answered by Judy
Answer #4
i dont think that you understand what is going onwith this house and the previous 3 answerers havenot been completely correct either. You can notsell the house nor convert the title you are/willbe a beneficiary and can not make these types ofdecisions, like changing title or selling thehouse that is the trustees responsibility. Thebasis for tax purposes depends on how yourgrandmother gave it to you. If she put the housein the trust before she died then you must paytaxes on the difference between how much she paidfor it and how much you got for it. If she did itafter death then you have to pay taxes of thedifference between fair market value at her deathand the amount you sold it for. you can claim a250K or 500K if married exclusion if it was yourprimary residence for 2 of the last 5 years. nobeing a trustee does not affect SSI benefits asshe has no interest in the trust.
- answered by ainger452
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measure and fulfill your financial needs
