I intend to live in my home till the end of my days in my living trust the house is to be sold and all my assets to be devided equally between three nieces.My question is there going to be taxes on the sale of the house also do the beneficies have to pay taxes on what they receicve from my living trust.I live in Calroenia.Thanks for any information
2006-12-13 17:45:22 · 3 answers · asked by maryann 2 in Business & Finance ➔ Taxes ➔ United States
Under current estate law there would not be any tax (income) when the house is sold after your passing. This is because the tax basis is stepped up to the sale price at your death.
The current exemption from estate tax is $2,000,000.This is scheduled to go up to $3,500,000 for 2009. The estate tax will be out for 2010 and the exemption from estate tax will be $1,000,000 in 2011.
Watch for changes in the estate tax law. Congress tried this year ands failed. They will need to do something soon.
2006-12-13 22:45:16 · answer #1 · answered by waggy_33 6 · 0⤊ 0⤋
No capital gain taxes on your house since new cost basis for them is stepped up to the date of death value which is the sales price - no gain or loss. The rest of the trust will be an inheritance which is not income taxable - but any income earned by the trust after your death will be reported on Form 1041 and taxed to them. Your trustee should take care of this.
2006-12-14 04:18:32 · answer #2 · answered by spicertax 5 · 0⤊ 0⤋
Where on earth is "Calroenia"? If you mean California, then the rules are these: if the estate is worth less than $1,200,000, no tax is due. If more, estate taxes are due and a tax return must be filed by the executor. The beneficiaries owe no taxes.
2006-12-13 18:09:47 · answer #3 · answered by Anonymous · 0⤊ 1⤋