I think I've got the answer for this from reading other posts on the subject, but wanted to double-check that nothing has changed for 2023. My wife and I created a Living Trust (we are the grantor trustees) and transferred the deed to our home to the trust. We needed to set up Trust account (at Fidelity) to receive the proceeds from the sale (settlement attorney advised that we had to do this). Since we lived there five years as our only residence, and the proceeds were less than $500k (married filing jointly). We used a lot of the money toward our new home and some upgrades, and put about $35k in a mutual fund (in the trust account) since we don't need it right away.
- Am I correct in assuming that these proceeds ($338k) still qualify for the home sale exclusion?
- I assumed that capital gains (interest and dividends) from the mutual fund in the trust account are taxable, but will this require me to file a tax return for the trust, or can these proceeds be added to income on my 1040?
