Max W Posted September 19, 2019 Report Share Posted September 19, 2019 A marital trust (B) was created 4 years ago when spouse died. The home, only asset, sold this year, so there was a good amout of LTCG. Does the trust get the Sec 121 ($250K) exemption?t Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted September 19, 2019 Report Share Posted September 19, 2019 The only trust eligible for the exclusion is a grantor trust. see reg 1.121-1(c)(3)(i) I believe it would have been allowed under a provision of the EGTRRA of 2001, but that was subject to sunset. 2 Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted September 19, 2019 Report Share Posted September 19, 2019 Did you step up 50% of the house at date of death? 1 Quote Link to comment Share on other sites More sharing options...
Max W Posted September 20, 2019 Author Report Share Posted September 20, 2019 4 hours ago, Abby Normal said: Did you step up 50% of the house at date of death? Yes, and it was based on appraisal at that time, 2014. Quote Link to comment Share on other sites More sharing options...
Max W Posted October 1, 2019 Author Report Share Posted October 1, 2019 From a article I will post here, it seems that the B trust can still claim the Sec 121 exemption if a QTIP election to file as an estate is made, as there was no estate return filed when spouse died. Of course it would have to be a late election and the article does not get into how that is handled. https://aboutlivingtrusts.com/step-up-in-basis-with-a-b-trusts/ Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted October 1, 2019 Report Share Posted October 1, 2019 Max, as I understand it, the QTIP will move the assets from the estate of the decedent to that of surviving spouse. However, I don't know if reg 1.121-1(c)(3)(i) will apply since the house was not owned by a grantor's trust at the time of sale, maybe an attorney can help. I hope your client appreciates the digging and scratching you are doing for them. Quote Link to comment Share on other sites More sharing options...
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