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Level 6

Question

The Sale of Home in a Trust

Forum|Forum|1 year ago
January 26, 2025
8 replies
38 views

If the sale of a home for personal use was sold in a Trust and there was no gain (in fact there was a loss) where on a 1041 Trust tax return would this be shown and if the principal from the sale was distributed to Beneficiaries, likewise, where would this be shown on the tax return? Thanks!

Level 15

Principal distributions would not be shown on the K-1s to the beneficiaries.

Losses on personal use property are not deductible, nor could such losses be used to offset gain on the sale of any other trust assets.

Level 6

Even though a loss on a home in a Trust is not deductible I would think that a loss or gain goes on Schedule D and Form 8949 (Sales and Other Dispositions of Capital Assets) If the 1041. Is that correct? If the principal from the home sale is distributed to the beneficiaries where does it go on the 1041? Thanks!

Level 15

Principal distributions from trusts are not reported on federal income tax returns.