Thank you for requesting me specifically. Please do note that your Neutral Feedback posted negatively impacts me on the prior question. I feel like I completely and correctly answered your question as presented. If you would log in on that prior question and post positive feedback instead it would be appreciated.

This question as presented still leaves a lot to speculate on. I need to know who the present beneficiaries of the Trust are. You say that your aunt is entitled to 1/2 and you are entitled to 1/2. However, later you say your sister is getting 1/2 of the proceeds.

The fact is that to get the property out of the trust and to your aunt it has to be distributed. It can only be distributed by the trustees to the current named beneficiaries. If that is you and your aunt then you would then each own 1/2 interest in the property individually. You would retain the tax basis in the property that stepped up upon your G.F's death. If you then turn around and sell your 1/2 interest then you are responsible for the full capital gain that is due. This would be the case even if you later split the proceeds from the sale with your sister and your children.

You can reduce or eliminate your capital gain by doing a 1031 like kind exchange for your 1/2 interest in the property. This would mean that you would have to find a replacement property worth $225,000 or 1/2 the value of the property. Instead of taking cash from the sale the proceeds are used to purchase the new property. This allows you to defer the capital gain from the sale of this property so that the built in gain of the property is rolled into the new property.

I am cannot provide you with specific legal advice. I can provide you with general information about the law related to your inquiry. My answer, and any information that you can find online, should not take the place of having a detailed consultation with a lawyer in your area to advise you regarding your specific issues.

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