Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
Level 2
posted May 24, 2024 8:12:47 PM

1041 Trust - Sale of Home Not held for income

Hopefully not too lame a question.

Settlor died and the Trust owned the house before death. 1041 filing and Trust pays taxes. Probable no pass-through K-1 option. Basis is stepped up at DOD. 9 years after death, house sold but wasn't rented out during those 9 years. Large gain from sale. Is the income/gain taxed at the capital gains tax of 20% or at the regular tax for income, i.e. $3,500 plus 37% over $14,450 because it wasn't held to produce income? Thanks

 

0 1 11029
1 Best answer
Level 12
May 24, 2024 8:45:28 PM

 Is the income/gain taxed at the capital gains tax of 20%

Yes, capped at 20%. The compressed trust tax rates just get you to the 20% cap sooner.

1 Replies
Level 12
May 24, 2024 8:45:28 PM

 Is the income/gain taxed at the capital gains tax of 20%

Yes, capped at 20%. The compressed trust tax rates just get you to the 20% cap sooner.