Handling of 1099-S with Decedent's TID wrt Living Revokable Trust

[stardolphin]

What is the name of your state?California

I'm trying to do the final tax return for the decedent. We sold her house within 3 months of her passing.
How do we handle the 1099-s in terms of these taxes? The 1099-S for the sale of her house was attached to her SSN, not the trust's.

With a Living Revokable Trust I understand that there is no capital gains except for 'step up' which should be negligible in that short time window.
Should I just put the sales price in as basis? Should I just ignore the 1099-S? (Ignoring is seldom the right course, I know)

Thank you for any help here.
Michael.

 

[Taxing Matters]

What is the name of your state?California

I'm trying to do the final tax return for the decedent. We sold her house within 3 months of her passing.
How do we handle the 1099-s in terms of these taxes? The 1099-S for the sale of her house was attached to her SSN, not the trust's.

With a Living Revokable Trust I understand that there is no capital gains except for 'step up' which should be negligible in that short time window.
Should I just put the sales price in as basis? Should I just ignore the 1099-S? (Ignoring is seldom the right course, I know)

Thank you for any help here.
Michael.

I'll explain by way of an example. Let's assume that Andy has a revocable living trust and has his home owned by that trust. Andy is not married. Andy dies on 4/1/2018. On the day Andy dies, the trust became irrevocable. Under federal tax law, that has the effect of the home getting a step up in basis to the fair market value (FMV) of the home on that day. Also, for federal tax purposes, the home is considered transferred from Andy to a trust. The trust is now recognized as a separate entity from Andy's estate. The trust sells the property 3 months later. Because the trust is the seller of the property, the sale is reported on the trust's income tax return. It will NOT get reported on either Andy's final return or on the income tax return of the estate. Unless properties in that area increased in value significantly in that 3 month period of time the sale price can generally be used as the basis, too, on the assumption that a bona fide sale to an unrelated third party is a sale at FMV. That would typically mean that the trust would have a small loss on the sale.

If the trust did not own the property and Andy owned it directly, the result is very similiar except that the sale is reported on the estate's income tax return. In no case would the sale go on Andy's final 1040 return.

 

[LdiJ]

If the trust did not own the property and Andy owned it directly, the result is very similiar except that the sale is reported on the estate's income tax return. In no case would the sale go on Andy's final 1040 return.

I thought it would be helpful to have the above bolded.

 

[TrustUser]

i got a 1099-s this year.

when i filled it out, i placed the sales amount listed on the 1099 in column d.

and then all the selling expenses in column g, with a negative sign on it.

and then added g and d (a negative number), to get my actual sales price

which i then used, when i subtracted by basis in the property, to come up with my net gain.

 

[LdiJ]

i got a 1099-s this year.

when i filled it out, i placed the sales amount listed on the 1099 in column d.

and then all the selling expenses in column g, with a negative sign on it.

and then added g and d (a negative number), to get my actual sales price

which i then used, when i subtracted by basis in the property, to come up with my net gain.

What critical piece of information is missing in this explanation?

 

[TrustUser]

the schedule number ?

mostly i was trying to help him with making sure he got his selling expenses in, while still using the number that was on his 1099

 

[LdiJ]

the schedule number ?

mostly i was trying to help him with making sure he got his selling expenses in, while still using the number that was on his 1099

Yes, the schedule number, which you still chose not to include. You didn't help him at all because you didn't include that. You info was worthless without it.

 

[TrustUser]

if you are looking for an argument, you need to go elsewhere

 

[Taxing Matters]

Yes, the schedule number, which you still chose not to include. You didn't help him at all because you didn't include that. You info was worthless without it.

I'm sorry, but I think this line of attack is unwarranted. Sure, he didn't provide the schedule number. But neither did you, and you could have done that rather than go down this route. As the OP didn't ask for the schedule number I'm just not seeing the point of the whole exchange.

 

[LdiJ]

I'm sorry, but I think this line of attack is unwarranted. Sure, he didn't provide the schedule number. But neither did you, and you could have done that rather than go down this route. As the OP didn't ask for the schedule number I'm just not seeing the point of the whole exchange.

The first post I made was an attempt to be a bit funny, because he made the point to be so detailed with his answer but neglected to provide the form number. I did not provide it because I was not certain myself to which form he was talking about. I could guess, and probably accurately, but I wanted him to provide the form/schedule number. When he opted not to provide it the second time, I will admit that it irritated me and I was sharper than I probably should have been.

 

[TrustUser]

just so you know, here are my thoughts

i was not sure what you were getting at. what i would have expected someone to say is just "in case the op does not already know, i would like to add to what trustuser said, and state that this is on schedule d"

i was not sure if you were talking about the schedule number, or something about the specifics. in explanation, i could very easily have accidentally left something out from what i actually did on the form.

from the op's original post, i take him to be fairly intelligent, and fairly knowledgeable. since capital gains is well known to be on schedule d, i assumed that he already knew that

and since i had put these numbers in just hours before i saw the post, i thought he might wonder how to get his selling expenses in. i had to google the net to make sure. i expected to get a 1099 with an amount on it equal to the check that i received

i sold a place a few years ago, and do not recall this situation occurring to me (a 1099 for greater than my check amount)