My Mom passed away in April 2020. We sold her condo which was in a grantor trust and a cabin which was in another grantor trust. Both were sold within six months of her death so selling price was approx same as FMV on date of her death. Both trusts received a 1099-S reporting the sale proceeds so tax returns will need to be filed for those trusts. Myself and my siblings were the beneficiaries of both trusts. So we should get the step up in basis and have zero or very small gains to report on the sale of both assets--is this correct? How do I report this on the trust returns? My understanding is the trusts were grantor trusts which do not require any entries on the tax return but do require attachments with explanation. Would the attachment include the explanation of facts and names, SSNs of beneficiaries? Then each beneficiary reports their portion of the sale of each asset and the resulting gain, if any, on their tax return? I have some tax experience but have never had to deal with anything like this before. I don't want my siblings to be mad at me if its not done correctly!
