I wife and I are beneficiaries of a Family Trust with 3-other parties. My father-in-law died a number of years ago and at that time the house was appraised at $400,000 and was recently sold for $600,000. The trustee paid taxes on the 200,000 capital gain and other expenses and distributed the remainder to all 4-parties. The amount distributed to each beneficiary was $140,000, do we owe tax on that amount? I’m assuming the answer is No based on what I have read online and in the TurboTax forums. The beneficiaries live in states that do not tax property gains from family home sales where total estate assets are under a minimum tax threshold and the sale is not subject to Federal estate tax.
