Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Rental property basis in trust vs. not in trust
Old 04-19-2014, 06:04 AM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Dash man's Avatar
 
Join Date: Mar 2013
Location: Limerick
Posts: 5,637
Rental property basis in trust vs. not in trust

I have a question about passing a rental property on to our heirs and the basis for taxes when sold. We have been taking depreciation on a rental property for 12 years and the property is not currently in our family trust. If we died the cost basis would be reset to the current market value and the kids would not have to pay tax on recouped depreciation if they sold it.
If we moved the ownership of the property into our trust, would the cost basis be reset upon our death or would the IRS consider ownership to still be the trust and keep the tax basis the same?
Dash man is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 04-19-2014, 07:15 AM   #2
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 4,172
some thoughts.......you will certainly want to verify esp. for your particular state, etc. Don't know about the depreciation part.

We live in a community property state so property is in our joint A/B trust while we are both alive. At first death, property gets step up in basis and is put into either survivor trust (A) or residuary trust (B) or perhaps gets split between the two. If put into the A trust, it belongs to survivor who has power to dispose of it as he/she wishes so upon the 2nd death, it gets a second stepup.
However, if put into the B trust after the 1st death with the initial stepup,
when the 2nd death occurs, ownership is still with the irrevocable B trust so there is no 2nd stepup in basis.
kaneohe is offline   Reply With Quote
Old 04-19-2014, 07:20 AM   #3
Recycles dryer sheets
 
Join Date: Jun 2010
Location: Southwest Florida
Posts: 470
If the trust is included in a decedent's estate the property will acquire a new basis.
Bruce
Gill is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
How to find the Basis on Rental Homes JustMeUC FIRE and Money 14 10-19-2012 06:38 AM
Community Property States--Tax Basis charlie FIRE and Money 2 03-26-2007 12:39 PM
Advantages/Disadvantages of rental property? military spouse FIRE and Money 52 01-26-2006 06:17 PM
Rental property rent raises Toejam Other topics 12 03-09-2005 04:48 AM

» Quick Links

 
All times are GMT -6. The time now is 04:45 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.