My mother passed away in 2018. The Living Trust specified that the house was to be sold and split between the three (adult) children. (And I assume that since we inherited it at the stepped up basis, there will be no tax implications.) We did NOT put the house in our collective names before selling...the Living Trust was the seller of the house...
The house was sold in 2019 and the "Living Trust" has received a 1099-S for the selling price of $345,000.
I know I need to fill out a 1041 for the "Living Trust" of my mother. But I don't understand how this all works....
Does the Living Trust, on schedule D, claim the house sold for $345,000 and had a cost basis of the same? Do Schedule K's get made and sent to myself and my siblings for $115,000 each? Or $0, since the trust had no profit. Or do Schedule K's even get generated and sent?
Or does the Living Trust show a gain of $345,000 and each sibling gets a schedule K for $115,00 and each claim it as inherited income?
I just can't wrap my head around how all this is supposed to work...I am so confused with what seems like it should be simple to understand....can someone please explain how all this works...
