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Richard, Lawyer
Category: Real Estate Law
Satisfied Customers: 55474
Experience:  32 years of experience as lawyer in Texas. I'm also a Real Estate developer.
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My brother brought my husband and I a home and its in a

Customer Question

My brother brought my husband and I a home and its in a trust. If we sell it can we and buy a smaller more affordable home , can we set up a trust with the remainder of the money from the sale? Barbara
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Richard replied 1 year ago.

Good morning. My name is ***** ***** I look forward to helping you.

Can you provide me a bit more information? Is this an irrevocable trust? Or, is this a revocable living trust? Who is the trustee? What does the trust agreement say about distributions from the trust? Thanks.

Customer: replied 1 year ago.
It's a survivor trust. It was a foreclosed home that has regained it value and too expensive to live in retirement...selling it with a double value ...would a trust with the increase value keep us from taxes and a monthly income . Did I explain right?
Expert:  Richard replied 1 year ago.

Would it be possible for you to attach a copy of the trust agreement?

Customer: replied 1 year ago.
No not at this time ... Just a general question. We are just feeling our options for the next 2 yrs out . He paid $600.000 and now looking at a listing of $900.000 what happens to the profit? We were hoping for a retirement income. Is that possible ?
Expert:  Richard replied 1 year ago.

Thank you. If the trust is revocable, then you would be considered the owner of the house and you would be able to exclude up to $500,000 (as a married couple) of the gain from sale under Section 121 of the Internal Revenue Code due to it being your principal residence. If the trust is irrevocable, then the trust would be considered the owner, and the trust would pay tax on the gain as a long term capital gain. Any proceeds remaining after the payment of the taxes could be used to reinvest the proceeds in a smaller house and, subject to the trust agreement, the remaining amounts distributed to you.

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