Using this same scenario, I would like to add. My father died in July 2013. Before he died he had an attorney create an Irrevocable Trust in which only his house was placed (Done in June 2013). The FMV at the time of his death was $596,400. In January 2015, the Trust (I am the sole Trustee) sold the house for $580,500. My attorney said, I will receive a 1099-S from the Closing attorney for $580,500 and I should have no tax due. I am to file a 1041. My question is: What tax Schedule do I attach to the 1041 to show the FMV at death and the sell of the house. Also another question: I had expenses on the house: state taxes, utilities, maintenance and HOA fees between July 2013 and January 2015. Can I deduct those expenses and pass these Capital losses on to the two beneficiaries to be used on their personal tax filings?
