What is the name of your state? Ca.
Hi,
A friend has a revocable living trust. She would like to sell an option to buy her house, the option to be exercised at the time of her death.
The option payment would be approximately $350.000. If the option is not exercised the trust will give a note for the option payment, to be paid upon the sale of the house. The purchase price of the house at the time the option is exercised will be $1.2 million plus ½ of the difference between $1.2 million and the current market value.
The question concerns capital gains tax.
1. Will the trust be liable for any capital gains tax on the option or the fair market value at the time of death of the grantor?
(edit: this post was edited to reflect the new arangement that is being considered)
Hi,
A friend has a revocable living trust. She would like to sell an option to buy her house, the option to be exercised at the time of her death.
The option payment would be approximately $350.000. If the option is not exercised the trust will give a note for the option payment, to be paid upon the sale of the house. The purchase price of the house at the time the option is exercised will be $1.2 million plus ½ of the difference between $1.2 million and the current market value.
The question concerns capital gains tax.
1. Will the trust be liable for any capital gains tax on the option or the fair market value at the time of death of the grantor?
(edit: this post was edited to reflect the new arangement that is being considered)
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