I am inheriting real estate from my grandmothers trust along with my two siblings and four aunts and uncles. My siblings and I have come to an agreement with one aunt to sell our portion of the property when it comes out of trust. She made a down payment to each of us in 2013, with the rest to come when titles and deeds are complete, sometime presumably in 2014. This is land that is selling under fair market value.

My question is will I owe income taxes in 2013 for this down payment, and how do I figure capital gains on this property sale inherited through a trust? Is the property valued from the time of my grandmothers death six years ago, or when it comes out of the trust?