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A

Anonymous

Solved

Non-cash distributions from a Trust

Forum|Forum|4 years ago
April 16, 2022
1 reply
1 view

Hi

My Aunt passed away in a nursing home in January 2020 and i am the successor Trustee. Her assets are still in the Trust (home, cash). In order to pay for her care, we rented out the house for 5 years. The trust leaves all the remaining assets equally to me and my sisters. With COVID, it took till March 2021 to transfer the deed to us.

For tax year 2021, i'm filing a Trust Return and recognizing rental income in the trust for the first 3 months of 2021. Do i also need to take a Section 643 election for the non-cash transfer of real estate? if yes, how do is show that in the application? Also, we found out later that there were IRAs that are currently being settled, so the Trust will likely need to file another return for 2022.

TurboTax Business Windows

Best answer by Anonymous_

You should consult with local counsel and/or a local tax professional for this matter.

A Section 643 election would ordinarily not be required and you are referring to what application?

If the trust was a standard revocable living trust (aka grantor trust), the assets in the trust would have a basis stepped up to their fair market value on the date of your Aunt's death in January 2020.

Is this the first return you are filing for the trust?

Anonymous_Answer

Level 15

You should consult with local counsel and/or a local tax professional for this matter.

A Section 643 election would ordinarily not be required and you are referring to what application?

If the trust was a standard revocable living trust (aka grantor trust), the assets in the trust would have a basis stepped up to their fair market value on the date of your Aunt's death in January 2020.

Is this the first return you are filing for the trust?

Level 15

Also, with respect to the IRAs, were beneficiaries named or was the trust named as beneficiary (or was there not a named beneficiary?

A

Anonymous

There were no beneficiaries for the IRA. That’s also been a challenge to get right with the financial institution. Lots of paperwork.