My mother had a revocable trust which held her personal residence. She passed away in April of 2020.
Her revocable trust becomes an unrevocable upon death. The trust had no income in 2020 so form 1041 was not filed. We are treating the RT as not part of the Estate.
1.Does this mean we did not take the section 645 election?
2.Do we need to file form 8855?
The RT sold her home in April 2021. Portions of the proceeds were disbursed to the beneficiaries.
3. The RT pays capital gains (if any) on the 2021 return correct?
4. Does the RT send the beneficiaries schedule K1s for the amount of money each beneficiary received from the RT from the home sale?
5. How is this income taxed to the beneficiaries?
6. Can they deduct a portion of the cost basis to offset the K1 income?
thank you so much!
