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Arthur Rubin
Arthur Rubin, Tax Preparer
Category: Tax
Satisfied Customers: 1551
Experience:  22 years of tax preparation experience, including individual, trust, and estate returns.
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My mother died in 2012. My father had died in 2005. My

Customer Question

My mother died in 2012. My father had died in 2005. My mother had made a living trust a few years before. I am the Trustee and me and my 2 sisters and one brother are the beneficiaries. I lived in the house my parents had owned. It was fully paid off. After I had lived there alone for 3 years, I sold the house this year and divided the proceeds among the four beneficiaries, including myself. I had no income. I had been living off SSI. My question is:
Is any tax owed either by me or the other 3 beneficiaries on the proceeds from selling the house, and am I required to send any notices or anything to the other beneficiaries?
Submitted: 1 year ago.
Category: Tax
Expert:  Arthur Rubin replied 1 year ago.

Thank you for using Just Answer.

If the will or the trust specifically allowed you to live in the house rent-free, then the trust as to fill out a 1041 (and CA 541), noting the sale of the house on 1040 Schedule D (CA 540 Schedule D). If the trust closes, the capital gain (along with the sales proceeds) can be allocated to the beneficiaries.

Assuming the house was in your mother's name or the name of the (then revocable) trust, the basis of the house is its FMV (Fair Market Value) as of your mother's death, plus any improvements.

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