Convoluted, but heh there has to be smarter people than me who can answer this.
House in a trust after death of grantor. Grantor passed 12/1/22. House was idle. House was rented May 2023, income received, expenses recorded, profit made. August 2024 House was distributed to a beneficiary's LLC. Rent continued at a profit. In December 2024 the business property was sold at a material loss i.e. December net proceeds were materially less than adjusted basis inherited from Trust.
Question 1
For the period of August thru December (beneficiary LLC tax return) rental income is recorded on Sch E, yes?
Question 2
Given that the rental business property was sold at a loss would this loss be picked up on 4797 AND considered ordinary Loss (which could be carried forward assuming it is greater than AGI), yes?
Question 3
Would the basis be on the date of the death of the grantor or when the beneficiary LLC assumed ownership?
Question 4
Would the basis be Adjusted Cost basis or FMV (stepped up basis)?
That's it. I would appreciate a stab at this. I have limited understanding, but will find the answer eventually. thanks.
