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Old 03-28-2015, 08:38 AM
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Where to list home sale on 1041 Trust return

I'm preparing the 1041 trust return for a person who died last year. The executor sold the house and distributed the proceeds to the beneficiaries this year. The tax year for the trust will end April 30, 2015.
How/where do I show the sale of the house on the 1041? I'm not sure what to call/where to put that asset on the Schedule D.
This will be the final return, with all remaining proceeds being distributed to the beneficiaries.



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Old 03-28-2015, 03:14 PM
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I'm preparing the 1041 trust return for a person who died last year. The executor sold the house and distributed the proceeds to the beneficiaries this year. The tax year for the trust will end April 30, 2015.
How/where do I show the sale of the house on the 1041?=======> The Form 1041 is used by estates and trusts to pay income tax on any income received by the estate. Form 1041 reports income, losses, capital gains and taxes on a domestic decedent's estate or trust.The exclusion allowance only applies to the sale of a taxpayer's principal residence. A trust doesn't have a principal residence, since it is not a living person. You need to report on Sch D of Form 1041. The beneficiaries can then claim a credit for tax paid on their beneficiary income .and taxable distributions (and their share of tax credits) in their own personal income tax returns.


I'm not sure what to call/where to put that asset on the Schedule D.
This will be the final return, with all remaining proceeds being distributed to the beneficiaries.
===============>>>>>>>>in general, revocable trusts are usually handled as Grantor trusts and taxed on the grantors' personal returns. When the Grantor passes, the trust becomes irrevocable, gets its own tax ID number and files a 1041aslongas this transaction is closed by the trust. The trust doesn't owe taxes in their final year, though the beneficiaries might, based on the income and deductions shown on their K-1s. The 1041 would show the distribution to each beneficiary. Since the individual income tax rate is lower than the trust income tax rate, trusts normally distribute their income to their beneficiaries if they are individuals. If the trust distributes any of its income to beneficiaries, the trustee must prepare SchK-1 for each beneficiary who has received a distribution. The trust must also file Sch K-1 with the IRS if it made any distributions to beneficiaries during the tax year.



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Old 03-28-2015, 06:37 PM
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Wnhough,
I understand that the proceeds need to be distributed to the beneficiaries via the K-1's.
I need to know where and how to report the value/disposition of the house on the Sch. D. I'm thinking it'll go in Part II, Line 8 - but am not at all sure.
Any help with that?
Thx.



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Old 03-28-2015, 06:48 PM
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I'm just not sure where on the Schedule D the capital gain/loss (disposition of the house) gets listed. I'm guessing it would begin on Line 8 - is that correct?



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Old 03-28-2015, 07:24 PM
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Originally Posted by kgilby View Post
I'm just not sure where on the Schedule D the capital gain/loss (disposition of the house) gets listed. I'm guessing it would begin on Line 8 - is that correct?
YouNEED TO report the sale of inherited property on Sch D of Form 1040. You must also provide information about the property on Form 8949, which requires the address of the property, the date you inherited the house, the date of the sale, the sales price and the adjusted or original basis, as applicable.
The IRS always considers the sale of inherited real estate long-term capital gains, regardless of how long you owned the property, so you must enter information about the sale in Part II of Sch D, which starts on Line 8. you may need to use the information you provided on Form 8949 to complete Lines 8 through 21 and enter the resulting figure on Line 13 of Form 1040.



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Old 03-28-2015, 07:43 PM
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Originally Posted by kgilby View Post
I'm just not sure where on the Schedule D the capital gain/loss (disposition of the house) gets listed. I'm guessing it would begin on Line 8 - is that correct?
you are correct.



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Old 03-29-2015, 03:33 AM
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I'm thinking it gets put on the trust return's Schedule D & 1041, since the house went to the trust at death. The executor then sold the house and distributed the proceeds to the beneficiaries. They (benes) would receive K-1's that include those proceeds. Right?



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Old 03-29-2015, 12:43 PM
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Originally Posted by kgilby View Post

#1;I'm thinking it gets put on the trust return's Schedule D & 1041, since the house went to the trust at death. The executor then sold the house and distributed the proceeds to the beneficiaries.


#2 They (benes) would receive K-1's that include those proceeds. Right?
#1;correct.sorry my bad
#2;exactly; sorry not you a trustee, byt they ,beneficiiaries need to report them on their 1040s based on their k1s.



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Old 03-29-2015, 04:04 PM
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Great, thanks for your help Wnhough!

Next up will be figuring out how to complete all the K-1's...



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