Sold a home held in a trust

[BavarianGal]

In  2025 my husband passed away and I sold the home that we had for 25 years in a family trust.  I purchased a new home in 2025 of almost the same value.   How do I report the sale of the house in the trust.  New house also moved into the same trust.

[DavidD66]

I assume the family trust you reference is a revocable grantor trust, in which case you may not have to report the sale.  In general, you don't have to report the sale of your home (personal residence) if your gain on the sale is less than $500,000 if married filing joint or $250,000 if single, and it was your primary residence for two of the past five years.  However, you do have to report the sale if you received a Form 1099-S. 

If required, report the sale in TurboTax as follows:

1. Log in to, or open your return
2. Navigate to the sale of home section:
   • TurboTax Online/Mobile: Go to: Federal >> Wages & Income>>Less Common Income>>Sale of Home
   • TurboTax Desktop: Search for sale of home, and select the Jump to link.
3. Answer Yes to "Did you sell or have your home foreclosed in 2025?"
4. Select Continue on the next screen.
5. Enter the address of the home you sold on the next screen, and select Continue.
6. Follow the onscreen instructions.

[Hi Palms]

Sorry for your loss.

Read the terms of the trust. If the trust makes you the sole owner upon the passing of your husband, then you acquired half of the property from him and can use a stepped up basis for his half that you acquired. That means your basis for the 1/2 you acquired by virtue of his passing is the fair market value on the date of his passing. 

The other half would be your original cost basis plus the cost of improvements and you could use the home sale exemption for yourself of $250,000. You could also use the entire $500,000 exemption but you need to see which method works out best for you.

All of this assumes the trust was a grantor trust and you were 50% owners of the assets or at least the house. If you live in a community property state, the entire basis of the house would be stepped up to the fair market value on the date of your husband's passing.

[BavarianGal]

Understand, thank you very much!

[BavarianGal]

Thank you,  I did receive a 1099-S so easy enough to enter into Turbo Tax.   Appreciate your advice.