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The issue with your revocable living family trust is that the trust MUST be divided into two parts and all assets held in the trust must be divided as well.The part A will still be treated as grantor trusts and ignored for tax purposes - so all income will be reported on YOUR tax return.The part B will be treated as irrevocable trust - and it is a separate taxing entity.
The basis of assets held in Part A is your basis
and the basis of assets held in Part B is stepped up basis equals to fair market value at the time your spouse passed away.
Actually to determine the basis of the house - we need to know how it was allocated between part A and part B. If it was divided equally between these parts - so you will determine the basis separately for each half.Another issue to consider - if you are living in a community property state. If yes - the full house gets stepped up basis..I appreciate if you take a moment to rate the answer.Experts are ONLY credited when answers are rated positively.If you still have any doubts, need clarification - please be sure to ask.I am here to help you will all tax related issues.