@spittybug wrote:
And are you saying that there is a means used by a certified appraiser to put a value (retroactively) to 2007?
Yes. An historical appraisal can be done and it is optimal if done by a certified appraiser (licensed in the state in which the property is located); this is the most conservative approach and one that is almost universally accepted by the IRS.
@spittybug wrote:
The principal, upon her death, was to then be distributed to her children.
You do need a professional who can read and evaluate the trust, but it does appear as if the beneficiaries may actually get a stepped up basis if the grantor retained the right to use the property exclusively until her death. That would be similar to drafting a deed with a retained life estate.
The foregoing notwithstanding, you should seek professional help with this scenario as there are quite a few variables.
