Form 1041 Question About a Trust Selling a Home

[trust812]

If a Trust sells a home where on Form 1041 and on the  K-1 would the sale of the home and the money each beneficiary received be reported? My understanding is that if the home hasn’t appreciated since the decedent died there would be no income taxes for the beneficiaries. Is that correct?

[tagteam]

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@trust812 wrote:

......if the home hasn’t appreciated since the decedent died there would be no income taxes for the beneficiaries. Is that correct?

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Yes, only gain or loss would be passed through to the beneficiaries on the K-1s.

[trust812]

@tagteam  But if the home in the Trust was sold what type of Trust tax form would the home be reported on? For example, let’s say the Trust sold the home for $500,000 and there were 2 beneficiaries which received $250,000 each from the Trust. Would this only be reported on the Beneficiaries’ 1040 and not on any Trust tax return?