I have a revocable trust of which I am the trustee. If I transfer my second home to the trust and then sell it, what will be the capital gains tax? The property has been held more than one year. The trust has no other income. Suppose I do a 1031 transfer?
State/Country relating to question: Florida
Checked tax regulations to the extent that I understand that: (1)the long term capital gains tax is 15% or 0%, depending on tax bracket; (2) 1031 transfers are tax deferred on the gain; and (3)I do not qualify for the $250,000 or $500,000 exemption.
Thank you for posting your question to JA/Pearl. Legal questions often take time for research or I may be offline so please be patient, I will reply.There is no reason to transfer it to the trust if you are going to sell it. The only purpose of a revocable trust is to avoid probate. There is no tax advantage or disadvantage to transfer the property to the trust, the tax treatment will be the same. As for 1, 2 and 3 you are correct.
Practicing attorney with expertise in easements
What is the tax bracket of the trust?
The trust does not have a separate tax bracket, it is the same as yours.
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