Thank you @Mike9241 , I will look at any prior tax returns I can find to determine if he reported these financial withdrawals in the past. I believe he only withdrew on principal, not on income.
So the house-- even though it was owned by the trust and never transferred to the name of the son, he only lived there-- the FMV would be based on the date his death last year? Even though the tax filing will be on the parent's trust and not the son's?
And sorry, I was mistaken, the sight-unseen estimate we received was for $364,407, so we sold it at a "loss" of $44,407. We did not pay for an appraisal due to the biohazardous state of the property, and it is too late to pay for one now since it is already being remodeled.
More specifically, that realtor's report stated the following: Your Comp Analysis - $364,407; Your Comp Analysis Range: $267K – $494K.
I received another emailed statement from a realtor who saw photos of the home and gave me the figures for 1) a local median price per sqft and a $369,750 estimate based on that figure alone, 2) an opinion that an investor would value it at $250,000 (then again, he worked closely with an investor who offered $230,000; and the investor we sold it to purchased it for $320,000).
Any advice you can give would be great. The trust lawyer I consulted told me to consult a tax professional. I'm not sure who to ask at this point.
You stated, "the valuation should have been what the property could sell for," - if I take this literally and claim that the house is worth the exact $320,000 it sold for, would I not have to report the sale to the IRS at all since that would be considered zero gain or loss?
Thank you again.
