I received money from the sale of property (house) that was in a trust. I was one of 4 people who received money from the sale.
What are my tax implications for the money received? How to I add this income? to my 2023 tax filing?
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You would report this as a sale of an investment. Before you begin though, you will need to know the Fair Market Value (FMV) of the house at date of death of the decedent. Once you have this amount, you would divide this amount by 4 to determine your share of the cost basis of the house. Now to report:
Did you receive a K-1? Who paid you your share of the proceeds (e.g., a trustee of the trust)?
You need to inquire as to nature of the trust and also whether or not the trust will issue a K-1 to you and, further, whether or not, the trust paid any income tax due on the sale of the property.
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