Question

Sale of inherited house in a revocable living trust

Forum|Forum|1 year ago
March 25, 2025
1 reply
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my father passed away in Jan 2024. his house is in a living trust; the only asset in the living trust. The house was put on the market in Jan 2024 for $500,000 and was sold in Nov for $450,000 (so with the step up no capital gains). There are 3 beneficiaries. I have turbotax home and business desktop version. When entering in the sale of his house with the 1099-S (transfer's TIN is my fathers SSN) do i put it under my father's tax return? or do i need to create a new tax return for the living trust? if i need to create a new return for the living trust, what option do i pick. i don't see an option to create a 1041 trust. I only have two options, 1040 for individual income or W-2/1099 (reporter for employers)

TurboTax Home & Biz Windows

R

RobertB4444

I want to tell you to put the sale of the house on your dad's tax return and call it a wash since filing another tax return for the trust feels like an annoying waste of time.

But the only way that you get the step up in basis is because of your father's death and avoiding any taxes on the house sale is a good deal. So you need to file a trust return.

Even though the 1099-S is issued to your dad's social security number you're going to enter it into the trust as though it were issued to the trust. Then you'll enter the basis as the exact same number and you'll have no loss and no gain and that will be it. You can check the boxes for initial return and final return all on the same one.

Here is where to get the TurboTax Business software to file the trust return.

@csj3

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