Question

How to calculate tax due after I sell my rental property under trustee ?

Forum|Forum|4 years ago
April 2, 2022
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Employee

@Huuh , if I assume that the situation is as follows --- you bought one/more rental property(ies) and transferred all of these to a trust ( living trust ) of which you are the trustee.; Now the trust has sold one of the rental properties and you wanted to report this.

In such a case you have to file a federal Trust return ( use TurboTax Business NOT individual 1040 return ) and a fiduciary return for the state where you live as also for the state where the disposed property existed.

Hopefully , during the period while the rental property was in the trust, you filed a trust return recognizing the rental income and expenses. If you filed the rental income along with you own individual return , then this would have been an error and you need to take corrective action. I hope you mean a trust and not a single member LLC as the entity holding the property sold.

Does that make sense ? Do you need more help ?

H

HuuhAuthor

@pk12_2 , Hello, Thank you very much for your answer, from which I learned a lot.

I sold my rental property under trust in 2020, and reported capital gain in my individual tax return last year. Seems it was a big mistake.

I usually use Turbotax premium to do tax return. Is it too late to do correction? Seems I need help from a CPA ?

By the way, if for rental property under trust there is totally different way to report sale, how about reporting annual rental income ? I always do this with my individual tax return. Would you please help?

Thank you so much for your kind help !!