topic Family trust sold land for less than auditor evaluation. in Get your taxes done using TurboTax

Family trust sold land for less than auditor evaluation.

Corp — Wed, 18 Mar 2020 12:06:30 GMT

need help, please.

In 2019, my mother passed away and named my sister and I the executors of a trust that owned land via a TOD. My sister & I sold the land in 2019 for the County auditors evaluation amount less lien insurance(~3% of value). Then distributed the money between our siblings (11 of us). During the process, our lawyers told us there should be no tax implications as we sold for less than market value and family had owned the empty, not used land since the 1970s. However, I am not able to determine how to properly enter the transaction in Turbo tax Premier.

When I enter under under 'other investments in 2019' then select land, it acts as if the entire amount is income.

Re: Family trust sold land for less than auditor evaluation.

Irene2805 — Wed, 18 Mar 2020 12:40:05 GMT

I'm sorry for your loss!

The sale of the land should have been reported on the tax return for the trust and you should have received a K-1 for your share.

However, if you are entering it in your return, be sure to enter just your portion and enter the NET amount.

The sale of land is considered the sale of an investment. You can report the sale in TurboTax using these steps:

Click on Federal > Wages & Income
In the Investment Income section click on the Start/Revisit box next to Stocks, Mutual Funds, Bonds, Other.
If you have already entered some investment sales, you will see a screen Here's the investment sales info we have so far. Click on the Add More Sales link.
If you haven't yet entered some investment sales, you will see a screen Did you sell any investments in 2019? Click the Yes box.
On the screen, Choose the type of investment you sold, mark the button for Other and click Continue.
On the next screen, Enter Land Sale Information, enter the sale information. Be sure to enter the NET proceeds.
On the next screen, enter the sale date.
On the screen, Tell Us How You Acquired This Property, mark the radio button for Purchase and click Continue.

Continue through the screens, entering the requested information

Re: Family trust sold land for less than auditor evaluation.

Corp — Wed, 18 Mar 2020 13:35:03 GMT

Thank you. The trust did not provide a K1 form. So I entered the information as your described in the steps below, only claiming half the sales (dividing the sales and land value by 2).

It just looks a little weird that the value of the property I assumed control of in June of 2019 was less than what it was sold for in Nov of 2019 b/c of the Lien insurance that was deducted from net proceeds, lessening my overall tax burden.

Thanks again.

Re: Family trust sold land for less than auditor evaluation.

Irene2805 — Wed, 18 Mar 2020 13:59:35 GMT

You're most welcome!