Do I convert the title first before selling it? (how's the tax base calculation?) Or should I sell it under the trust( my aunts are the trustees)? Which tax base of selling title will be higher so that I can pay less capital gain? Thanks.
Also my aunt is getting Federal Supplemental Security Income (SSI). She has no money interest (not a beneficiary) with the living trust. Does it hurt her SSI Status from being a trustee? Thanks.
2007-06-12 17:46:56 · 4 answers · asked by EggshellHead 1 in Business & Finance ➔ Taxes ➔ United States
i dont think that you understand what is going on with this house and the previous 3 answerers have not been completely correct either. You can not sell the house nor convert the title you are/will be a beneficiary and can not make these types of decisions, like changing title or selling the house that is the trustees responsibility. The basis for tax purposes depends on how your grandmother gave it to you. If she put the house in the trust before she died then you must pay taxes on the difference between how much she paid for it and how much you got for it. If she did it after death then you have to pay taxes of the difference between fair market value at her death and the amount you sold it for. you can claim a 250K or 500K if married exclusion if it was your primary residence for 2 of the last 5 years. no being a trustee does not affect SSI benefits as she has no interest in the trust.
2007-06-13 06:46:59 · answer #1 · answered by ainger452 3 · 0⤊ 0⤋
It would help if you stated the amount that you are going to sell the house for. I might be wrong, but I believe you are able to have capital gains of $250,000 if you are single and $500,000 if you are married from the sale of a home, without having to pay taxes. I think you can do this every two years, (that is the part I am unsure of). Either way, depending on the amount you will gain from the sale of the home, you may not get hit hard. To make everything easier, I would transfer the title to yourself, that way, you don't have the complications when dealing with a trust. I can't comment on the SSI question. I don't know anything about that. Sorry.
2007-06-12 18:00:37 · answer #2 · answered by Justaguess 2 · 0⤊ 4⤋
Your tax basis will be the house's value on the date of your grandmother's death. It makes no difference whether your aunts sell as the trustees or whether they distribute the house to you and you sell it. As your aunt is the trustee and not a beneficiary, her SSI should not be affected by her acting as trustee.
2007-06-12 17:57:15 · answer #3 · answered by mattapan26 7 · 2⤊ 1⤋
Mattapan26 is correct. Justaguess is not correct - that exclusion from capital gains is available only if you live in the house as your main home, and own the house, for at least two full years of the five years immediately before the sale, and it doesn't sound like that's the case here.
2007-06-12 19:48:04 · answer #4 · answered by Judy 7 · 1⤊ 0⤋