Distribution of capital gains from a trust - how to report my share in turbotax

[KenGoodhue]

My father in law owned a condo in a trust.    The trust sold the condo last year and distributed proceeds to all 7 of his kids.    We received a grantor's letter showing our 1/7 share of the capital gain that we need to report on our taxes.    I understand I need to report it on form 8949 as a capital gain.    Here is my question.   Let's say there was $70K in capital gains - bought for $100K, sold for $170K.       When I enter the information in turbotax, do I report the sales price as $170K/7 = $24,286, cost $14,286, gain = $10,000?    Or do I enter the total sales and cost information the trust has reported, then check the box that says "some or all of the proceeds from this sale do not belong to me" and enter a number that reduces the total capital gain to our share (report $70K in capital gains, then a $60K adjustment)?

[Mike9241]

have to ask this. was your father-in-law alive when the condo was sold? was he still the trustee or had other power and rights over the trust assets so the IRS would say it's a grantor trust. if so, the grantor would be taxed on all income.  if he had died a full trust return (not a grantor trust return) would have needed to be filed.  In that case, you would get a regular K-1 not a grantor trust letter. 

i strongly suggest you and the other beneficiaries consult a lawyer because based on what you provided F-I-L should pay taxes on the entire gain subject to his eligibility to tax the home sale exclusion. then since he made gifts to each of you of more than the $15,000 limit he would also have to file a gift tax return.   

[KenGoodhue]

Thanks Mike.    My father in law has been deceased for a few years before the condo was sold.

Does that make a difference?