Legal Question in Wills and Trusts in Massachusetts
Hello. We purchase a single family dwelling back in 1987. We rented the house out to a family. In 2002 we created a Family Realty Trust with five equal beneficiaries with its own IRS acct number. In 2012 the trust expired but this rental income property continued on. Now, with the property vacant, the majority of the beneficiaries want to sell the property. One of the beneficiaries wants to keep the property and continue the trust under new terms and to defer paying the capital gains taxes at this time. Is this possible under the UTC?
1 Answer from Attorneys
There is no capital gain by distributing the property from the Trust, you take the asset at the same value (proportionately) that the Trust has as a basis in the property. If the property is sold, you will all recognize a capital gain.
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