How is the money taxed on the sale of a home through a living trust?
I am on the title of my mother’s home through a living trust. Due to her deteriorating health we must sell her home. I will need the proceeds from the sale of her home to pay for her new rental situation. How is this money taxed and where would be a good place to keep this money as I need certain amounts each month?
Please do not respond with the answer to contact the lawyer. I’m obviously posting the question to try to avoid paying additional legal costs.
August 11th, 2010 at 4:58 am
Talk to the attorney who set up your living trust. He or she should have (or be able to lovcate) all the necessary information needed to answer your questions.
August 11th, 2010 at 5:43 am
Iif your mother bought the house for $150,000 20 years ago and sold the house before she died at $350,000, the basis would be the value of the home when she bought it years ago. If you and your sisters take possession, the basis would be the new value of $350,000.
Though the house is already owned by a living trust, you may also want to talk with the estate planning attorney about using a Qualified Personal Residence Trust (QPRT) in which to hold the property.
FindLaw.com gives a very good laymans explanation of how a QPRT works:
A Qualified Personal Residence Trust (commonly called a “QPRT”) is sometimes called a way in which you may give your home away and live in it, too. In reality, it is a way of transferring your home to another party (usually children) at a reduced transfer tax cost Under a QPRT, your home is transferred to the trust and you retain the right to live in the home for a specified period of time. At the end of the period, you may provide that the home be distributed to your children or to a trust for them.
After you sell the property a good safe place to put your money would be in a Guaranteed Income Stream Annuity,
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