My grandmother passed away in 2000. At which time she left farm property in a life estate testamentary trust. The land was held in in the trust with my father receiving the farm income for the rest of his natural life. Upon his death in 2022, the land has now been turned over to me. Will my basis in the property be the FMV when my grandmother died in 2000, or when my father died in 2022? Obviously after 22 years, there has been substantial appreciation.
I am sorry for your loss.
You need to consult with an estates/trusts attorney and/or a tax professional who can review the terms of the trust (language and parties named therein are critical components).
If, for example, the trust named you and your father as beneficiaries (e.g., your father as primary with you as successor) then, generally, the basis would be the fair market value of the property on the date of your grandmother's death. There would be only one step up in basis.
If, on the other hand, your father was given full control over the property in terms of income, use, disposition (i.e., the trust was essentially a grantor trust), then the trust would generally terminate upon his death at which time the property would receive a second step up in basis. However, the foregoing does not appear to be the case from what you set forth in your original post.
Again, you need to consult with a professional in your area.
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