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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
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Experience:  10 years experience
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In my Father's trust 12 years after he passed the property

Customer Question

in my Father's trust 12 years after he passed the property would come to me, so i have 2 pieces of rental property, both are in different states, when the 12 years ended in April of this year the trustee's quitclaim deeded them to my trust, one of the properties in idaho might sell, how much capitol gains will i pay both for state and federal?? and how much is the federal tax? how do i figure this out?
Submitted: 2 years ago.
Category: Tax
Expert:  Lev replied 2 years ago.
Hi and welcome to our site!Your father's trust is irrevocable - and it is treated as a separate legal and taxing entity.When appreciates assets are distributed out from such trust - that is treated as the sale on the trust's tax return - form 1041.The FMV of the property is treated as the sale price - and that would be your basis.The trustee of your father's trust will need to file the tax return for the trust and because there were distribution to you - there will be form K1 issued to you as a beneficiary to report your share of taxable income..When you subsequently sell the property - you will use the FMV at the time of distribution as your basis for calculating the gain or loss on that sale - so if sold shortly after that - most likely - there will not be any gain.