topic How do I file on the sale of farm land in a trust? in Investors & landlords

How do I file on the sale of farm land in a trust?

Duffer56 — Sun, 02 Feb 2020 01:12:32 GMT

Re: How do I file on the sale of farm land in a trust?

DavidS127 — Mon, 03 Feb 2020 13:37:12 GMT

You will need to file Form 1041, US Income Tax Return for Estates and Trusts to report the sale of farm land. You can use TurboTax Business to file the Form 1041 for the trust.

Re: How do I file on the sale of farm land in a trust?

knate — Mon, 17 Feb 2020 18:15:53 GMT

I have turbotax business but can't see under the income categories where I can record the sale of the land

Re: How do I file on the sale of farm land in a trust?

Hedge0 — Wed, 11 Mar 2020 23:04:16 GMT

What if the land is simply in a living trust (no separate EIN), do you still have to use a 1041? or can you just report on the 1040?

Re: How do I file on the sale of farm land in a trust?

DaveF1006 — Thu, 12 Mar 2020 00:48:39 GMT

You would report it in 1040 as farm income:

federal>wages and income>Rentals, Royalties, and Farm>show more
Farm Income and Farm Rental>start
select I have income operating a farm
Next you will enter your farm's Name and other information
then you will reach a screen that says tell Us About Your Farm
the next screen is where you will check that you sold or otherwise disposed of this farm during 2019 then will begin asking a series of questions about the sale of your farm

Re: How do I file on the sale of farm land in a trust?

MaryCMiller — Sat, 08 May 2021 18:53:11 GMT

I am using Turbo Tax Business. I sold land that was in my parents' trust. I have gone to

Federal Taxes > Income > Rental and Royalty Property.

The property is already listed there, because we have always declared rental income in past years.

There was a box to check that said "This rental property was sold or otherwise dispoed of during 2020."

It asks me if I paid anyone $600 or more for work done, number of days of usage during 2020, what rental income we had ($0), our rental expenses, rental assets, and that is it.

But Turbo Tax does not ask me any further questions about the sale price, the cost basis, expenses involved in the sale, etc.

Can anyone tell me where to find this?

Re: How do I file on the sale of farm land in a trust?

MaryCMiller — Sat, 08 May 2021 19:06:54 GMT

I am using TurboTax Business, and Form 1041. But under Rental and Royalty Property, when I check the box that says this property was sold in 2020, it doesn't ask me any further questions about the sale price or cost basis or expenses involved in the sale.

Thank you for any assistance!

Re: How do I file on the sale of farm land in a trust?

DaveF1006 — Wed, 12 May 2021 03:22:58 GMT

I tested out my Turbo Tax Business product for trusts. After indicating this property was sold in 2020, it asked me about income and expenses. Go back to your property summary page and select edit. Go through the complete section until you are done. You should be given the opportunity to enter this information.

Re: How do I report the sale of farm land from a trust on form 1041?

AshleyCoco — Mon, 11 Apr 2022 17:39:29 GMT

Farm land (not rental property, not a homestead) was sold out of a newly created trust. The only place to report the sale of property is under rental/royalty income. However, other than asking if the property was disposed of in the tax year, there is no scree in which to report the gain/loss on the sale.

Re: How do I report the sale of farm land from a trust on form 1041?

RobertB4444 — Tue, 12 Apr 2022 01:16:15 GMT

When you tell the system that you sold the property this year it will ask you all of the questions related to the sale as you go through the rental real estate.

You should be reporting the sale of the property under sales of investments in your 1041 return.

Re: How do I file on the sale of farm land in a trust?

MarkG5 — Sat, 01 Feb 2025 16:54:18 GMT

This is the final year of the Revocable Living Trust. Grantors have passed. We sold farmland and made distributions to beneficiaries. As executor of trust, I'm concerned about where this is reported in the 1041 Trust Return. Isn't this treated as capital gains and therefore taxed as such. I wanted to pay tax in the trust. Please call me and advise.

Re: How do I file on the sale of farm land in a trust?

DaveF1006 — Tue, 04 Feb 2025 22:44:24 GMT

This income is reported in the following manner in your form 1041 in Turbo Tax.

Go to federal taxes
Income
investment Income
Stock, Mutual funds Stocks and other

Once you have reached this section. here is how you will proceed with the rest of the interview.

The first screen will ask if you sold any investments during the current tax year (This includes any sale of real property held as an investment property so answer “yes” to this question)
Next question asks if this was an investment acquired from a decedant. Here you will answer yes or no.
Next answer the question about financial institution from the drop-down that will appear..
Now you will enter information about the farmland sale. What you enter here will determined your capital gains tax for the year. Items such as:
1. Description – Usually Once he address of the property sold
2. Sales Proceeds – The amount you received for the sale
3. Date Sold – Date you sold the property
4. Cost or other basis (This is where you put the purchase price of the home

Once the information is entered, a capital gain or loss is determined and gets passed on to the beneficiaries. Also the tax owed, if any, is passed to the beneficiaries and the beneficiary, and not the trust or decedent's estate, pays income tax on their distributive share of income

IRS 1041 Trust Instructions

@MarkG5