Thanks. I think he might be considered a substantial owner for the time the house was owned by his Trust. I'm now looking at the Federal Tax Coordinator Analysis (RIA), which observed that "any person (beneficiary or a grantor) who is treated as the owner of the trust under the grantor trust rules could exclude the gain from the sale of a residence" if they satisfied the ownership and use test described. And "for purposes of determining whether the ownership test is satisfied, presumably, the person treated as owner of the trust could combine any period that he owned the residence individually with the period of time that the trust had owned the residence." I just need to get a little more into the tax code and the revenue rulings (assuming they are still good after the Chevron decision). This is not my area of expertise (took one tax class in getting a Masters degree) .... I just know enough to research items to be dangerous.
