NASSAUSUFFOLK

My clients established a grantor trust many years ago, the primary asset in the trust was their primary residence.

During 2009 husband died, wife died in 2012. 

The trustee sold  the residence in 2013. My question is whether IRC 121, $500,000 exclusion, can be utilized by a trust to offset some of the capital gain.

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Michael Jaffe
CPA
MICHAEL B. JAFFE, CPA PC
Commack NY
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Mike - I would do it since a grantor trust is not a completed gift.
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M. Daniel Martin BA
M. DANIEL MARTIN, CPA EA
Babylon NY
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Original Message:
Sent: 03-02-2014 11:00
From: Michael Jaffe
Subject: GRANTOR TRUST

My clients established a grantor trust many years ago, the primary asset in the trust was their primary residence.

During 2009 husband died, wife died in 2012. 

The trustee sold  the residence in 2013. My question is whether IRC 121, $500,000 exclusion, can be utilized by a trust to offset some of the capital gain.

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Michael Jaffe
CPA
MICHAEL B. JAFFE, CPA PC
Commack NY
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Look to the trust document to be sure it is grantor trust. Look for retained incidents of ownership such as right to change beneficiaries, substitute property, use the property. If those terms exist, I agree with Dan, it was not a completed gift, so the home sale exclusion would apply.
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Robert Sick
ROBERT SICK, CPA PLLC
Patchogue NY
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Original Message:
Sent: 03-03-2014 08:31
From: Michael Jaffe
Subject: GRANTOR TRUST

My clients established a grantor trust many years ago, the primary asset in the trust was their primary residence.

During 2009 husband died, wife died in 2012. 

The trustee sold  the residence in 2013. My question is whether IRC 121, $500,000 exclusion, can be utilized by a trust to offset some of the capital gain.

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Michael Jaffe
CPA
MICHAEL B. JAFFE, CPA PC
Commack NY
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Michael:

As, Bob Sick said, you have to read the trust. It is highly likely that the trust was a QPRT(Qualified Personal Residence Trust). The term of the trust may be very important in determining if all or part of the 121 exclusion applies.

If you are interested in attending the Thursday night meeting, Rob Barnett and Carol Markman are doing a roundtable. If you send your question to Etta in the office, they will give you an answer.

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Robert Brown
ROBERT N. BROWN, CPA
Jericho NY
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Original Message:
Sent: 03-03-2014 18:42
From: Michael Jaffe
Subject: GRANTOR TRUST

My clients established a grantor trust many years ago, the primary asset in the trust was their primary residence.

During 2009 husband died, wife died in 2012. 

The trustee sold  the residence in 2013. My question is whether IRC 121, $500,000 exclusion, can be utilized by a trust to offset some of the capital gain.

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Michael Jaffe
CPA
MICHAEL B. JAFFE, CPA PC
Commack NY
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