Trust income Capital Gain question

[neilbrink]

Individual was the owner of a farm, that when she died several years ago, she left it in a trust for her brother so as to receive the income as long as he lived.  He died recently, and now the trust is dispersing the assets of the trust, including the proceeds from the sale of the farm.  The brother did not at any time own the farm.  Am I assuming correctly that the basis in the farm sold is the value of the farm at the time of the individual owner's death, which occurred several years ago?

[OldJack]

I agree date of original owner dod FMV unless basis has changes during the trust period such as improvements or destruction.

[DANRVAN]

On ‎12‎/‎22‎/‎2016 at 4:57 PM, OldJack said:

I agree date of original owner dod FMV unless basis has changes during the trust period such as improvements or destruction.

Also adjust for depreciation allowed or allowable.  Since this a farm, there are most likely depreciable assets.  It is not clear if the brother was a life tenant of the farm or a beneficiary of the trust.  If he was a life tenant, he would be allowed the depreciation per Section 1.167(h)-1. Then, after the farm reverts back to the trust, the adjusted basis of the assets in the hands of the brother would go to the trust per the Uniform Basis Rule of Section 1.1014-4.