Reporting requirement for sale of inherited property from a trust

[tg2022]

If the property was sold  for more than the basis at time of death is the trust and the individual heirs required to file a tax form to account for the sale and distributions?

[K M W]

If the property was held in a trust and sold during the tax year, then a Form 1041 trust return may need to be filed.  For a domestic trust, a tax return must be filed if the trust has: 

1. Any taxable income for the tax year,

2. Gross income of $600 or more (regardless of taxable income), or

3. A beneficiary who is a nonresident alien.

4. If you held a qualified investment in a qualified opportunity fund (QOF) at any time during the year, you must file your return with Form 8997 attached. See the Form 8997 instructions.

TurboTax Business can be used to prepare Form 1041 Trust Returns.