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House held in trust

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appreciative

Junior Member
What is the name of your state (only U.S. law)? CA

My mother recently passed away, and I am the trustee of her trust (and executor of her will). (My father passed away several years ago.) I have 2 siblings, and we will be selling her house, which is held in the trust. Do I need to have an appraisal done on the house now (to establish the value at time of death)? We plan to put the house on the market within the next few months. And are there tax implications if the house is not sold within a certain period of time? Thank you in advance for your help.What is the name of your state (only U.S. law)?
 


FlyingRon

Senior Member
You can if you want, but in today's market it's pretty flat so you can probably get by with assuming the FMV is pretty close to the sales price.
 

appreciative

Junior Member
You can if you want, but in today's market it's pretty flat so you can probably get by with assuming the FMV is pretty close to the sales price.
Thanks, FlyingRon... And in California, does the house need to be sold within a particular period of time in order to avoid some sort of additional tax penalty? (Someone mentioned this might be the case...)
 

tranquility

Senior Member
You need to see a tax professional. You have no idea about the basis of the house. You need to know how title was held through the marriage and at death of dad. How and if the irrevocable trust was funded and how title was held by mom at death. Was there a step up of all or 1/2 at dad's death?

An appraisal will be necessary as the sale will not be within six months of death--if an estate tax return is filed. Since one probably will not, you still have the duty of proving up basis, but a qualified appraisal is not required by the code.

The timing of the sale has to do with the house and section 121. Again, timing and titling are issues. When did mom die? When will the sale be? When did mom last own the property in a revocable trust? Did the house go into the irrevocable trust on dad's death?
 

appreciative

Junior Member
Thank you for your follow-up, Tranquility. We do plan to see a tax professional in a couple of weeks, but I wanted to have a vague idea what to talk with them about. Your questions have been very helpful. Thanks again...
 
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