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Will my home sale proceeds be taxed?

We are selling our home which is titled in the name of our living trust. My wife and I are the only beneficiaries. The proceeds must be wired to a trust account, rather than to our personal account. The exemption for primary home sale proceeds is $500k for filing jointly, but since the proceeds must go through the trust account, does this change the applicability of that exemption?
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Will my home sale proceeds be taxed?


@SteveJ57 wrote:
.....since the proceeds must go through the trust account, does this change the applicability of that exemption?

No, it does not change the applicability of the exemption per Section 1.121-1(c)(3).

 

See https://www.law.cornell.edu/cfr/text/26/1.121-1

 

 

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4 Replies

Will my home sale proceeds be taxed?


@SteveJ57 wrote:
.....since the proceeds must go through the trust account, does this change the applicability of that exemption?

No, it does not change the applicability of the exemption per Section 1.121-1(c)(3).

 

See https://www.law.cornell.edu/cfr/text/26/1.121-1

 

 

Will my home sale proceeds be taxed?

Thank you! This is SO helpful. Another question if I may: I need to establish a TIN for the trust account (never had an account for it before this). The IRS website has a form to do this rather painlessly (see https://sa.www4.irs.gov/modiein/individual/index.jsp), but I want to make sure that I use the correct type. This is a revocable living trust, so I intend to use the "Revocable Trust" path, rather than the "Trust (All Others)" path. Is this correct?

Will my home sale proceeds be taxed?

Yes, select that option if the trust is a revocable trust (aka living trust - grantor trust).

Will my home sale proceeds be taxed?

Thanks again! So helpful.

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