I am the trustee for my father's trust who passed away in 2024. He had shares of stock that were inherited into the trust that were then sold and cash distributed to myself and siblings. My question is about what to put in the Acquisition Date column for the shares. The financial company shows 12/28/2023 as the acquisition date. We inherited the shares on 1/29/2024...the date of his death. These are long term capital gain transactions but TurboTax does not let me indicate for long term capital gains that they were coming from my father (decedent) any where. Short term gains, it asks me to qualify those as coming from a decedent or not. Anyway, any thoughts on which date to use?
Sorry for your loss. As trustee, you need to file form 1041 to report the sale of the stocks by the trust. This requires the Turbotax Business app. For the acquisition date type "Inherited" (no quotes) that results in any gains/losses being treated as long-term which is proper even though the trust held them for less than a year. also, make sure the reporting uses date of death values as the cost basis.
As trustee, you must make a choice. If there were net gains, either the trust pays the tax and then the remaining cash is distributed tax-free to the beneficiaries or the Trust can distribute the net gains to the beneficiaries in which case they pay the income taxes.
If there were net losses and the trust terminated, the capital loss would be passed out to the beneficiaries to use on their 1040s.
All of this would show up on the k-1 generated for each beneficiary.
Sorry for your loss. As trustee, you need to file form 1041 to report the sale of the stocks by the trust. This requires the Turbotax Business app. For the acquisition date type "Inherited" (no quotes) that results in any gains/losses being treated as long-term which is proper even though the trust held them for less than a year. also, make sure the reporting uses date of death values as the cost basis.
As trustee, you must make a choice. If there were net gains, either the trust pays the tax and then the remaining cash is distributed tax-free to the beneficiaries or the Trust can distribute the net gains to the beneficiaries in which case they pay the income taxes.
If there were net losses and the trust terminated, the capital loss would be passed out to the beneficiaries to use on their 1040s.
All of this would show up on the k-1 generated for each beneficiary.
Yes…I’m using TurboTax Business. Thank you for answering my question. I did not know you could type in Inheritance in what looked to be a date formatted column. But it worked. I have more questions that I’ll post in a different thread concerning capital gains on the 1041 and K-1’s. Thanks again!