Irrevocable Trust - Final Year Mother contracted to build a house in New York State in 2005 and paid $170,000. Put it in an IRREVOCABLE TRUST when she moved in with a life estate. She paid all the taxes and maintained the property while she lived there. She died in 2016 and the house sold for $139,500 in 2017. There was an independent paid-for appraisal that put the value of the house at the sale price. The three beneficiaries of the trust equally divided the money from the sale. Since it was an irrevocable trust, there is no stepped up basis for the house. Is it true that each of the beneficiaries should receive a K-1 for the estate this year that would indicate a capital loss they can claim on future taxes up to $3,000. per year? |