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Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 12679
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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My house is in a trust of which I am the grantor and my son

Customer Question

My house is in a trust of which I am the grantor and my son is the trustee. I am selling the house and going to buy a new one. How should I do this to limit my tax burden?
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: What do you want to know
JA: Is there anything else important you think the Accountant should know?
Customer: No
Submitted: 5 months ago.
Category: Finance
Expert:  Lane replied 5 months ago.

Hi. My name's Lane.

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If this is a revocable trust, then the trust is disregarded for ta purposes.

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Further, if you have lived in the house for an 24 months out of the five years before selling, $250,000 of the gain (500,000 if you file as married filing jointly) is completely excluded from income (IRC §121)

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If this is an IRRevocable trust, then things are different, the trust instrument will dictate.

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Let me know if this is an irrevocable or revocable trust.

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Lane

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I hold a law degree, with concentration in Tax Law, Estate law & Corporate law, an MBA in finance, a BBA, and CFP & CRPS (Chartered Retirement Plans Specialist) designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice to clients on three continents since 1986

Customer: replied 5 months ago.
Thank you! It is a revocable trust.
Expert:  Lane replied 5 months ago.

Then yes, this is treated as a sale by you personally and the gain can be excluded, as I mentioned above.

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At the closing the title or escrow company will have a certification form that you can sign stating that this is your primary residence, and there will be no 1099-[S or tax reporting required at all

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UNLESS the gain ... sale price minus (purchase price plus improvements) is more than 250,000 for a single filer or $500,000 for joint filers

Expert:  Lane replied 5 months ago.

Please let me know if you have ANY questions at all, before rating me.

I hope you’ll rate me (using those stars, or faces on your screen, by clicking submit) based on thoroughness and accuracy, rather than any good news / bad news content.

Otherwise I’ll receive no compensation for the time & expertise here at all, from JustAnswer.

Thank you!

Lane

Expert:  Lane replied 5 months ago.

Hi,

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I’m just checking back in to see how things are going.

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Did my answer help?

If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the stars or faces on your screen, and then clicking “submit")

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But if you need more on this, please let me know.

Lane