Home sold held in Revocable Trust

[jnbmccown]

Sold my home held in a Revocable Trust. My spouse passed in 2015 and the FMV is less than the purchase price.  Secondly, if I do use the 2015 FMV, do I factor in the settlement/closing fees when we purchased or just the 2015 FMV

[Anonymous_ · Accepted solution]

Was the trust a joint trust? How, exactly, was title being held? 

[jnbmccown · Accepted solution]

Home was in Calif, community property, joint tenants with right of survivorship.

[Anonymous_ · Accepted solution]

In a community property state, the entire property (not just one-half) receives a stepped up basis to the fair market value as of the date of death of the decedent.

However, there is also the concept of a step-down basis (i.e., if the fair market value is less than the adjusted basis, then the basis is still the FMV on the date of death). 

Regardless, if the sale results in a loss, that loss is not deductible if the property was held for personal use.

[jnbmccown · Accepted solution]

Thank You for your response,

So if I am understanding right, I use just the FMV at the time of my Husbands passing on the worksheet and NOT enter the settlement/closing fees at the time we purchased?

[Anonymous_]

That is correct.

[jnbmccown]

Thank You, Thank You so much for your time and assistance!!  Have a great evening.....