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Trust Capital Gain


Max W

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  • 2 weeks later...

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/

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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.

 

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