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Can a loss on the sale of a personal house (home of decedent and in the trust) be passed on to the beneficiaries on the K-1s? The FMV of house, selling price, and expenses of sale generates a loss. Or, because the home was the primary residence of the deceased, does the loss stay with the Trust and not passed through to beneficiaries?
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yes
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Thank You. So, it is not relevant that the house sold was the primary residence of the decedent?
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Sold after death, right?
Did anyone live in it after grantor's death?
Trust was of a kind that the house got a step up to date of death FMV?
Ex-AllStar
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Sold after death? Yes
Did anyone live in it after grantors death? No
Not sure if I understand the third question. "Trust was of a kind that the house got a step up to date of death FMV? " Are there certain trusts that do not allow a stepped-up cost basis? It was a revocable trust. Thank You
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Yes there are certain trusts and transfers thereto where there is no step up.
Sounds like you have a plain vanilla Revocable/Living/Grantor Trust where the assets get a step up upon the death of the Grantor.
After death, the assets are deemed to be held for investment, in the absence of other facts saying they are not.
Ex-AllStar
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It is my understanding that irrevocable trusts do not allow the stepped-up basis, I was not aware that other kinds of trusts do not allow a stepped-up basis. You are correct I have a revocable trust. The fact that the house was the personal residence of the grantor...does that have any effect on the stepped-up basis? Thank You