What to do about a revocable trust was created after one spouse died?

What to do about a revocable trust was created after one spouse died?

The trust became a grantor trust once the second spouse died. Residential home lived in more than 2 years by the grantor was sold 3 years after her death. Therefore, the trust owned the home for 3 years before it was sold. Using the FMV (appraisal at time of death) as the basis in the home, there will be a gain. Does this gain need to be reported on Schedule D, Form 1041 or since this is a grantor trust and the trust held onto the house more than 2 years before the sale, would it qualify under the home-sale exclusion rule and therefore, not have to be reported at all on the Form 1041?

Asked on September 11, 2013 under Estate Planning, Kansas

Answers:

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