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Trust tax JA: Thanks. Can you give me any more details about

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trust tax JA: Thanks. Can you...
trust tax
JA: Thanks. Can you give me any more details about your issue?
Customer: my father passed away in 2013. we recently sold his home in 2015 and put the funds into a checking trust account, how do i record this on the trust taxes
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Submitted: 1 year ago.Category: Tax
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Customer reply replied 1 year ago
Also, bank accounts as CD accounts did not go into a trust but 50,000 was evenly distributed to each brother. This was not in a trust but my dad CD account. how do I record this on form 1041? or is not reportable? do my brothers receive a K1 for distributions?
Answered in 42 minutes by:
4/22/2016
Tax Professional: Lev, Tax Advisor replied 1 year ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,132
Experience: Taxes, Immigration, Labor Relations
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i i ASSUME THAT WAS A REVOCABLE LIVING TRUST- WHICH IS IGNORED FOR TAX PURPOSES.HOWEVER AFTER TE SETTLER PASSED AWAY - THE TRUST BECAME IRREVOCABLE AND FILES IT SOWN TAX RETURN.iF THAT ASSUMPTION IS CORRECT - the property is classified as inherited - and a suchIn case of inherited assets - the stepped up basis is used - which is equal to the fair market value of the property at the time the decedent passed away.For instance - if the fair market value was $600 in 2013 - we would need to use THAT value as the basis.The capital gain is calculated as (selling price) MINUS (adjusted basis) MINUS (selling expenses)The sale transaction is reported on form 8949 which is attached to form 1041..Assets that do not belong to the trust are NOT reported o trust tax return.These are assets belongs to the estate - which is a separate entity.HOWEVER - as an executor of the estate and as a trustee - you may choose to combine the estate and the trust as ONE entity.Also we do not report assets - only income is re portable.For instance - interest credited to CD account is reported on K1 - but the total value of that CD is not reported.Every beneficiary will received K1 which reports taxable income.The distribution of assets (corpus) is not reported on K1.Questions?
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Tax Professional: Lev, Tax Advisor replied 1 year ago
.Assets that do not belong to the trust are NOT reported o trust tax return.These are assets belongs to the estate - which is a separate entity.HOWEVER - as an executor of the estate and as a trustee - you may choose to combine the estate and the trust as ONE entity.Also we do not report assets - only income is re portable.For instance - interest credited to CD account is reported on K1 - but the total value of that CD is not reported.Every beneficiary will received K1 which reports taxable income.The distribution of assets (corpus) is not reported on K1...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 with all tax related issues.
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Lev
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,132
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