I'm sole trustee for an irrevocable trust created by my parents. They stipulated that EVERYTHING they had was gifted into the trust at the time it was established, even if it was not actually transferred on paper. After they died, we found that some stock was never transferred. This stock had come because of life insurance &/or annuities with the company and had a basis of $0.
We all thought the trust eliminated the need for a will. Actually, it did, except for these stocks. Looooong story, but I finally got ownership of the stocks into the trust & sold them.
Does the original $0 basis for the stocks follow into the trust or do I use the share price from the date of transfer? I'm not trying to finagle my way out of paying proper taxes. The trust is closed with all funds distributed. I already filed for 2021 for both myself & the trust (trust's final return). I just received a 1099-B (LATE) for a portion of the stocks & now know to expect 1 or 2 more.
I filed the 1041 claiming a basis of the share price on the date the stock was officially owned by the trust. I'm concerned I might have made a mistake that will appear to the IRS to be a deliberate misrepresentation. If the trust was only responsible for taxes for gain/loss from date of receipt to date of sale, does any tax liability for the gain from $0 to the date the stock went into the trust just go away since the prior owners are deceased?
ANY help will be appreciated so very much.
