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mrosen4949
Level 1

Capital gain for a beneficiary

My wife is one of six beneficiaries of my mother-in-law’s trust, of which I am the trustee. The primary asset of the trust was mom’s home. Following the step up in valuation the proceeds, net of broker fees, is a small loss. The house was sold within a year of mom’s passing. Although the home was held for many years is this short-term capital loss or a long-term capital loss? In addition, since all beneficiaries shared equally, I assume each report’s one sixth of the loss. Where on the tax return is this transaction reported? Many Thanks

1 Best answer

Accepted Solutions
Critter
Level 15

Capital gain for a beneficiary

Correct.

 

To prepare an estate  return you would need Turbotax Business.  This is a separate program from Turbotax Home and Business.  TT Business is a program only available for desktop windows use (there is no on-line or Mac version.) 

http://turbotax.intuit.com/small-business-taxes/

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3 Replies
Critter
Level 15

Capital gain for a beneficiary

Although the home was held for many years is this short-term capital loss or a long-term capital loss?  LONG

 

In addition, since all beneficiaries shared equally, I assume each report’s one sixth of the loss.  CORRECT

 

Where on the tax return is this transaction reported? FROM THE ESTATE'S TAX RETURN FORM 1041  EACH BENE WILL GET A K-1 FORM TO ENTER ON THEIR PERSONAL RETURN.  

mrosen4949
Level 1

Capital gain for a beneficiary

Thank you for that helpful response. So, it appears that I need to do the trust’s return form 1041 before the individual beneficiary’s can proceed with their own returns?

Critter
Level 15

Capital gain for a beneficiary

Correct.

 

To prepare an estate  return you would need Turbotax Business.  This is a separate program from Turbotax Home and Business.  TT Business is a program only available for desktop windows use (there is no on-line or Mac version.) 

http://turbotax.intuit.com/small-business-taxes/

View solution in original post

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