Legal Question in Wills and Trusts in Utah

I am the trustee of my late fathers trust, which holds a 50% interest in a piece of property. We recently sold the property, pursuant to right of purchase contract that my father signed before he passed. My question is tri fold... Do we get a step up in basis to FMV to avoid capital gains? Second, does the sale create any tax liability for the trust? Third, when the proceeds are distributed to the beneficiaries, will that create an income tax liability for them individually?


Asked on 11/29/12, 11:02 am

1 Answer from Attorneys
Randy Lish Randy M. Lish, Attorney at Law

If the trust is a typical revocable trust, unless there are other circumstances of which I am not aware, you should be able to get a step-up in basis on the property sold. The sale should not create any capital gains liability because of the step-up in basis. Again, because of the step-up in basis, there should be no income tax liability, unless proceeds are not distributed promptly, and earn income.

Read more
Answered on 11/29/12, 12:23 pm


Related Questions & Answers

More Probate, Trusts, Wills & Estates questions and answers in Utah