Home sale in irrevocable trust

[Hwill21]

I am using TurboTax for Business to report sale of mothers home in 2024. Home was held in a trust since 11/2021.  I am one of the trustees.  We did not file previously because there were no other assets in the trust.

There is no place I found in the forms to adjust the total basis, reflecting capital improvements over 61 years of ownership.  I put an estimate one form line, but Turbox does not use; Turbotax also does not reflect anywhere that first 250,000 of profit (mother is widower, one owner) should be non-taxable.  On a 630K sale (about 595K after sales costs, and subtracting adjusted home sale - I end up with a $517K capital gain!

Cannot find any place in the program to put the cost basis adjustments in.

[Mike9241]

if your mother has died,   the "cost" you use is fair market value on the date of her death. Add capital selling costs and the cost of subsequent improvements.  You must figure the total yourself. Turbotax provides no lines or boxes to enter these details. the is reported as a sale of a capital asset - Schedule D and the results should appear on line 4 of the 1041

if she is still alive, it raises the issue of whether or not the trust should be treated as a grantor trust. if so, the sale is reported on her 1040 (you use actual costs and selling expenses). Use the home sale worksheet since she would likely be entitled to the home sale exclusion. Despite being titled irrevocable, the IRS doesn't care. It's the provision of the trust in place while she is alive that matters. In this situation, ask the lawyer who drew up the trust document. 

[Hwill21]

Thank you. Useful information on capital costs for basis - basically I think I have to put capital improvements and selling costs all in the one line.

Regarding capital exclusion, lawyer says it is not a grantor's trust, but didn't answer whether exclusion may still apply as a 'substantial owner' - but it looks like Turbotax defaults that if not grantors, then exclusion doesn't apply.  (I don't think this is correct...)

I think I will need in-person tax professional help to answer that...