What is the name of your state? California
My mother passed away in 04/03. Her home had been transfered to her living trust, and I am the successor trustee. there was no probate. The trust designated that 1/4 share go to each of 3 sons, and the remaining 1/4 share be divided equally between 2 grandchildren.
The home remained in the name of the trust until it was sold in 7/05. There was a capital gain (Adjusted sales price > Adjusted basis).
My question is, who pays the capital gains tax? Should I file a 1041 as trustee and pay the tax on the capital gain, or should I distribute all of the proceeds from the sale, and let each beneficiary pay the tax? ie, did the trust realize the capital gain, or did the beneficiarys realize it indirectly through the trust?
My mother passed away in 04/03. Her home had been transfered to her living trust, and I am the successor trustee. there was no probate. The trust designated that 1/4 share go to each of 3 sons, and the remaining 1/4 share be divided equally between 2 grandchildren.
The home remained in the name of the trust until it was sold in 7/05. There was a capital gain (Adjusted sales price > Adjusted basis).
My question is, who pays the capital gains tax? Should I file a 1041 as trustee and pay the tax on the capital gain, or should I distribute all of the proceeds from the sale, and let each beneficiary pay the tax? ie, did the trust realize the capital gain, or did the beneficiarys realize it indirectly through the trust?