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]

.

[trust812]

I guess my question is if the house was sold by the Trust for $500,000 but there was no gain what tax forms for the 2 beneficiaries which receive $250,000 each would need to be filed for the Trust and individual tax returns and what lines of the forms would this money be reported on?

[tagteam]

Enter the transaction on Form 1041 but if there is no gain (and nothing else to report to the beneficiaries), then there would be nothing to report on the K-1s.

[trust812]

What line on the 1041 form does the sale of a home go? So If I distribute the $500,000 from

the sale of the home in the Trust ($250,000 to each to the 2 Beneficiaries) and the  home didn’t appreciate in value there are no K-1’s required and the Beneficiaries don’t have to report it on their individual tax returns? 

[Mike9241]

report on schedule D - capital gain.