Investments Acquired From A Decedent

[Basenji]

Hi, I am using TT Business to file a complex trust return. The trust was created (for a grandchild)  in 2008 from my mother's estate. I get to the 1099 B input area and the topic Investments Acquired From A Decedent,  TT Business asks the following question: 'Were the investment you sold acquired or inherited from someone who passed ownership on by means of a will or trust . . .?'. There is no additional explanation available to help with reaching a determination and the question is too broad to dismiss outright. So the portion of the estate for the grandchild was a cash value that was placed in investments under a complicated trust creation.

Does it apply solely to the current year - in this case 2019? Or to the life of the trust? So technically the trust was created from decedents estate but years ago, investments sold and bought over those years - how does this question apply?  How should it be answered in this case?

And finally it would be nice if TT Business provide a link to a more detailed explanation for handling this topic area.

Thanks

[tagteam]

Feel free to ask additional questions but, in short, the investments were not acquired from the decedent (your mother) unless they passed to her estate (or a trust) on the date of her death (i.e., she owned them personally prior to her passing).

Investments purchased with cash by the trust were not acquired from a decedent (despite the fact that the cash may have been acquired from the decedent - or "inherited").

[hntrust]

Would answer be NO in the event that a grantor's revocable trust became irrevocable at the grantor's death and contained mutual funds. The new trustee then sold the mutual funds to buy other more appropriate mutual funds for the trust's beneficiary?

[tagteam · Accepted solution]

The mutual funds held by the trust at the grantor's death would likely be included in the grantor's gross estate (assuming the trust was a grantor trust prior to death). 

If the new trustee bought "more appropriate funds", then those funds would obviously not be included in the grantor's gross estate.