Form 6252

[CJM22]

I inherited a 135 year old building from my dad.  The building was in his Trust and I transferred it from his Trust to an LLC.  Thankfully, it sold as Installment Sale in April 2024.  I was told since the building went from a Trust to an LLC, I wouldn't need to pay capital gains.  Is this true?  Also, I could use line by line help on this form.  Thank you!! 

[RobertB4444]

No, transferring the building to an LLC did not avoid capital gains on the sale.  Sorry.

If the building was transferred into the trust when your father died then what you "paid" for it - your basis - is the value the building had on the day your father died.  So when you sold it any amount over that value is a profit and is taxed as capital gains.  Any amount under that value is a loss and will be deductible on your taxes each year of the installment sale.

Are you using TurboTax for your form 6252?  Because the system will ask a series of questions and then do the form for you using the information that you provide.  Doing it by hand is going to be a lot.

But get started and come back here with your questions.

@CJM22 

[CJM22]

Thank you so much for your help.  We did have an "Opinion of Value" on the building after his death.  Can or should I use the valuation number, which will reduces my capital gains?  Yes, I'm using turbo tax.  My understanding is, first I do Form 6252, which will generate a Schedule D?  Thanks again for all your help!

[RobertB4444]

Yes, the opinion of value is the amount that you should use as your basis for the building.  Make certain that you save all of the records associated with that should there ever be any questions.

Yes, TurboTax will fill out the 6252 and then carry the numbers to any other necessary forms including schedule D.

@CJM22