You're going to report this on schedule D as a sale of a portion of your property. You are selling two acres. Based on the information that you have provided your basis in the property is $500 per acre which was its value at the date of death of your spouse who you inherited it from in 2008. So that is a $9,500 profit per acre for this easement.
If the remainderman is getting 20% of that then you would report your 80% on the trust return or on your personal return and the remainderman would report their 20% on their personal return. Or you can report 100% on the return that you are preparing and just pass the cash to the remainderman as a distribution.
You're going to report this on schedule D as a sale of a portion of your property. You are selling two acres. Based on the information that you have provided your basis in the property is $500 per acre which was its value at the date of death of your spouse who you inherited it from in 2008. So that is a $9,500 profit per acre for this easement.
If the remainderman is getting 20% of that then you would report your 80% on the trust return or on your personal return and the remainderman would report their 20% on their personal return. Or you can report 100% on the return that you are preparing and just pass the cash to the remainderman as a distribution.
Thank you, Robert.
Since long-term capital gains are taxed a 0%, 15%, or 20% (which is less than my tax rate), and since short-term capital gains and long-term capital gains are rolled up from Schedule D onto one line on the 1040, how/where is the long-term capital gains tax rate calculated and applied to the long-term capital gains (which this will be)?
Included in your tax return, you will have a Qual Div/Cap Gn Wks (qualified dividend/capital gain worksheet) that will show how the tax was calculated.
On the Form 1040 Worksheet, there is a Tax Smart Worksheet that will show you what worksheets were used to calculate your tax if the tax table was not used.