An irrevocable trust could receive a step-up if its property was included in the decedent's gross estate. This requires an examination of the trust terms and the conduct of its grantor, trustees, and beneficiaries from creation until the grantor's death. Generally, though, irrevocable trusts with investment real property are created with tax motivations and are designed not to be includible in the grantor's estate, and the basis adjustment under Section 1014 doesn't apply in those cases.
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Matthew E. Rappaport, Esq., LL.M.
Vice Managing Partner
Co-Chair, Taxation Group
Falcon, Rappaport & Berkman LLP
(516) 558-3377
mer@frblaw.com------------------------------
Original Message:
Sent: 08-12-2023 08:08 AM
From: Stephen Mankowski
Subject: Step up in Basis
David, I'm not the best expert for trusts, but my understanding is that if the trust was Revocable, you'd get the step up in basis as the owner held the rights to sell property during their life. Irrovocable Trusts would not get the step up in basis.
Steve
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Stephen MankowskiCPA
MANKOWSKI ASSOCIATES, CPA, LLC
steve@mankowski.cpa
215-682-7366
Original Message:
Sent: 08-11-2023 06:15 PM
From: David Rothfeld
Subject: Step up in Basis
Client created a family trust in 2011. Cleint passed away in 2022. Trust owned real estate representing four residential lots which was sold in October 2022, after the grantor of the trust passed away. Does the trust treat cost basis equal to the sales proceeds.
If not, please explain.
Thank you!
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David Rothfeld
DAVID J. ROTHFELD, CPA
Hicksville NY
516-433-2129
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