Living Trust Property Sale Question

[Edie Asker]

What is the name of your state (only U.S. law)? California
My mother died in 1992. At that time she had a condo in Oregon in a revocable living trust. My siblings did not want to sell the condo at the time of her death. My brother has been filing tax documents for the trust since her death (17 years ago). Now my siblings are interested in selling the property.
If it is sold while in the trust will the trust have to pay capitol gains on the increase in value since my mother's death?
Would the trust be allowed to distribute all the proceeds from the sale thus giving the tax responsibility to each of us (3 children of the deceased)?
Would we be better off taking the property out of the trust and then selling it as individuals?
I'm in a high tax bracket (35% combined). Would the proceeds from the sale be taxed as capitol gains, income, or both?
How can I find out if the trust would pay less taxes than me?
The condo is not and has never been a primary residence. The condo makes rental income which offsets fees for improvements and maintenance.What is the name of your state (only U.S. law)?What is the name of your state (only U.S. law)?

 

[tranquility]

How can I find out if the trust would pay less taxes than me?

After April 15, pay for an hour of a tax professional's time and ask.

He may want to prepare a dummy fiduciary return and personal return estimate to see, so plan on paying for a couple of hours.

Would the trust be allowed to distribute all the proceeds from the sale thus giving the tax responsibility to each of us (3 children of the deceased)?

Is the trust a simple or a complex trust?

If it is sold while in the trust will the trust have to pay capitol gains on the increase in value since my mother's death?

If a complex trust, probably. And, ordinary income on the depreciation recapture amounts.

 

[Edie Asker]

I'm guessing it is a simple trust since it was just written up to hold my parents stuff until they died. They didn't have that much stuff and the document is only a couple of pages long.

Thanks for your interest and taking the time to post a reply!

Your idea of waiting to ask a tax person after April 15 is good one

 

[tranquility]

Simple or complex has to do, in part, on how much of the trust's income has to be distributed. The recapture of depreciation may have to be fully distributed in a simple trust, while capital gains will have to go against corpus and be taxed in the trust.