Sold home held in trust with multiple beneficiaries to receive proceeds , who pays the step up basis capital gains .. is the trust responsible or beneficiaries ?

[Mad3759]

Who needs to claim the income from the sale of the home in the trust and pay the taxes ? 

[M-MTax]

The trust should specify that. Did the house sell for more than the stepped up basis? If it did then there is a gain and either the trust pays the tax or passes the gain through to the beneficiaries. Usually trusts pass gain through to the beneficiaries on their final returns.....but not always.

[Mad3759]

Thank you ! To “ pass the taxes through to beneficiaries “ so I just stipulate that on the trust tax return ? 

[M-MTax]

To “ pass the taxes through to beneficiaries “ so I just stipulate that on the trust tax return ?

Yes, you will make a distribution and issue K-1s to the beneficiaries. I hope you're planning to use tax prep software to do the 1041.