My father died in 2007, 50% of the home shared with his 2nd wife (Stepmother) was deeded to a family trust created by his will. Stepmom died 2023-house sold in 2024. Can we step up in basis to 2023 for the Trust half of the house like a life estate?

[DianeW777]

It depends. You can use a stepped up basis for the other half of the house on the date of death of your father's wife/your Stepmother, if it was still in her name as well as the family trust. The trust must be a revocable trust and the house was also included in her estate.

• Revocable Trusts: Assets held in a revocable trust are generally considered part of the grantor's estate and are eligible for a step-up in basis. 
• Irrevocable Trusts: Assets held in an irrevocable trust are typically not included in the grantor's estate and do not receive a step-up in basis. 

For more information about your situation, you may want to consult an attorney or CPA both educated in estates and trusts.

We are sorry for your loss

[tanama11]

Thanks so much for your response, Diane. The will does not specifically say it is revocable, but 50% of the home was deeded into the trust; I think this means it was part of my dad's estate.  Based on this, I believe it is a revocable trust.  Am I correct? - Thanks!

[BrittanyS]

To be considered a revocable trust the documents would have to indicate it can be amended or revoked.  Irrevocable trust would require a court order or beneficiary approval prior to changes.  Read through the trust documents to determine how changes are handled and if they require court or beneficiary approval for changes it would be considered an irrevocable.  

@tanama11