topic Revocable living trust and sale of primary residence in Deductions & credits

Revocable living trust and sale of primary residence

Poshc — Fri, 17 Jan 2025 11:17:02 GMT

We are selling a property that is in our revocable living trust. We are both the grantors and still living. Our trust bank account is under our ssn# and the funds from the sale will be funded to that account. In the interim, we erroneously signed up for an ein for our trust. The home sale proceeds would meet the $500k exemption requirements normally. Even though we have a trust ein, when we file our 1040, would we treat those proceeds the same as we would if the property was in our names vs the trust and report them on our personal 1040 and receive the exemption or did we cause an issue by getting the ein#?

Re: Revocable living trust and sale of primary residence

M-MTax — Fri, 17 Jan 2025 14:15:28 GMT

It is still a grantor trust (Sections 671 through 677 or 679) so it is still a disregarded entity for federal income tax purposes and you get the $500k exemption per Section 1.121-1(c)(3)(ii).

Re: Revocable living trust and sale of primary residence

M-MTax — Fri, 17 Jan 2025 14:17:21 GMT

If you do happen to get a 1099-S with the trust's name and EIN, you should complete a 1041 with a grantor's information statement.