Sale of a home in a complex trust

[Moth27]

My husband and I established a Living Trust (complex) in 2003.  When he passed away in 2015, the trust was split into two sections - Part 1 (under my social security number) and Part 2 (a tax identification number).  I am the trustee of the Living Trust (both Part 1 & 2), ie. the surviving spouse.  A year later in 2016, a home was purchased (for $305,000) under the TIN and I lived in the home as my primary residence.  That home was sold in 2023 for $650,000.  Since it was my primary home and I lived in it the entire time, does the $250,000 profit exclusion still apply if it is under a TIN? How do I report that when using Turbo Tax for Business (For Estates and Trusts)? I received a 1099-S from the title company.  This occurred in Washington state.

[M-MTax]

If it's a grantor trust that sold the home then you get the home sale exclusion but it's got to be a grantor trust according to IRC §§671 through 679. If not then no exclusion.

[Moth27]

It is a grantor, revocable trust so according to your post, I should receive the exclusion on the sale of the home.  What turbo tax program do I report this?  I am currently using TT Business to report other capital gains/losses under the trust TIN number.  When I click on the Home Sale section in that program, I can enter the sales price as well as the selling expenses and the permanent improvements made.  The program does not give me the chance to claim the exclusion or does any calculating that reflects that exclusion. Am I missing an entry somewhere?  

[M-MTax]

Yeah, you'd claim that exclusion on your own return.....your 1040.

[Moth27]

Well, that sounds easy enough but I am concerned since the 1099-S is under the TIN and not my social security number.  Does TT allow for that in their Premier program when I am generating my 1040 under my SSN?

[DianeW777]

There is no reason for concern.  File the sale of home on your personal return (as indicated by M-MTax) in TurboTax and if you feel better about it you can nominee the 1099-S to yourself from the trust.

Nominee Returns.  This is how the IRS knows what you are doing.

Generally, if you receive a Form 1099 for amounts that actually belong to another person or entity, you are considered a nominee recipient. You must file a Form 1099 with the IRS (the same type of Form 1099 you received).  You must also furnish a Form 1099 to each of the other owners. 

File the new Form 1099 with Form 1096 (this is a transmittal for the 1099) by mailing to the Internal Revenue Service Center for your area. (Provided on the Form 1096)

• On each new Form 1099, list the trust as the payer and yourself as the recipient. On Form 1096, list the trust as the nominee filer, not the original payer.  The nominee is responsible for filing the subsequent Forms 1099 to show the amount allocable to each owner (yourself in this case).

The forms filed with the IRS should be the red copy so if you don't have a color printer, go to the IRS website and order the forms here:

• Form 1096
• Form 1099-S

@Moth27