My mother has a house that was put in an irrovacable trust back in 2006. Her six children are named in the trust. My mother is now in an assisted living facility and wants us to sell the house. Can we sell the house if she is still alive and have the irrovacable trust? If so will all six children have to pay capital gains? If so, will the capital gains be based on the value of the house when it was built in 1952 or when it was placed in the irrovacable trust?
1 Answer from Attorneys
Yes, you can sell the house. More specifically, the Trustee of the trust can sell it. The house is deeded to the buyer and the buyer's cash comes into the irrevocable trust.
Capital gains taxes will be owed using your mother's basis. The basis needs to be calculated by a CPA but basically it is the purchase price plus improvements. Whether the tax is paid by your mother or the beneficiaries depends on the kind of trust it is.
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