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Was the trust irrevocable? ... (did the trust pay it's pwn taxes (1041) or did the grantor pay taxes (grantor trust)
related: What the wife using this under HEMS (Health education maintenance and support) so as to keep corpus out of estate? (not directly relate but will tell whether or not the trust was a separate entity)
sorry for the typo "Was" the wife ...
Trust was Testamentary, and the only asset was the residence; all other assets were distributed from Probate. Must have been irrevocable because H was dead.
The then trust go the step up on the 1st half
W never filed any known type of tax document for the Trust
Would not necessarily be irrevocable
If it was a revocable trust (grantor trust) the the W got step up and then heirs get step up from there
Was not created until H died; he can not revoke after death.
then the trust got the step up and the beneficiaries of the trust have a carryover basis (a deferred gift)
Yes if the trust continues, then yes, irrevocab;e .. more than just a will replacement
Basis is clearly stepped up in 1985. Is there any later step up in basis?
That's the point
If it had been a revocable trust... simply a will replacement where the property vested in someone (rather than the trust), there there would have been that secons step up
but with an IRREVOCable trust the beneficiaries are gett ing a deferred gift ... their basis is the 1985 basis
The benes would like he answer, but I agree. Just needed a confirmation.
Yes, a surprise for many ... time to pay for the other things accomplished
The benes wanted a step up on the second death, but that would have required the property to go to W, which is what H wanted to avoid, apparently. Thanks.
you have it
yes, either protecting for children or for get out of estate for 706 purposes, or both
First time I have used the service. I'll keep it available.