Trust Real Estate Sale

It depends.  If the trust still needs to file a final or annual return, if not closed, then that should be completed.  Either way the sale proceeds, if they came in the name of the trust, could easily nominee those proceeds to your husband.  The sale can then be claimed on your personal return.  See the nominee process below for your convenience, should you need it.

The cost basis would be the value on the date of death of his father and the sales price for your husband would be his half of the sale.  Sales expenses would also be allowed to be used if appliable.

Nominee returns. 

Generally, if you receive a Form 1099 for amounts that actually belong to another person or entity, you are considered a nominee recipient. You must file a Form 1099 with the IRS (the same type of Form 1099 you received).  You must also furnish a Form 1099 to each of the other owners. 

File the new Form 1099 with Form 1096 (this is a transmittal for the 1099) by mailing to the Internal Revenue Service Center for your area. (Provided on the Form 1096)

• On each new Form 1099, list yourself as the payer and the other owner, as the recipient. On Form 1096, list yourself as the nominee filer, not the original payer.  The nominee is responsible for filing the subsequent Forms 1099 to show the amount allocable to each owner.

The forms filed with the IRS should be the red copy so if you don't have a color printer, go to the IRS website and order the forms here: 

• Form 1096 Transmittal
• Form 1099-S

To report the sale of investment property, assuming your husband did not use the home as his own, follow the instructions below.

• Where do I enter investment sales?