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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] trust tax advantages? Posted by Rick on August 18, 2003 at 3:26 PM Regarding the Dena Eula Lee Robbins Revocable Trust Background: Dena Robbins’ house was left in her Trust for 5 years following her death, which was August 21, 1998. During that time her daughter, Linda Robbins was able to live in the house. The trustees of the Trust are Linda Robbins and Douglas Robbins. The beneficiaries of the house are also Linda Robbins and Douglas Robbins. The house will be sold at the end of the Trust and proceeds divided between Linda and Doug. At the time of my mother’s death, her attorney told my brother and me that nothing needed to be done and after the five years, we could do what we wanted to as far as selling or holding the property. Unfortunately noone ever mentioned tax concequencies. My brother thought because we were the beneficiaries, we would qualify for long term capital gains. And no one told me I could not claim the $250,000tax exemption unless the Deed was in my name for two years. So much for asking my accountant. My brother informs me now that we are planning to sell house that I have to sign document transferring Deed out of Trust and into Doug and my name in order to sell house. I challenged this and said house could be sold while in Trust. What are tax concequencies for both ways. His attorneys didn’t know. I assume that having the Trust sell the house qualifies for long term capital gains. I don’t know at what rate, but I believe 15% is top rate. If we transfer the Deed into our names before selling, I assume that we are taxed individually on our proceeds as ordinary income. I assume that having the Trust sell the house would be a tax advantage for both of us as far as income tax is concerned. I have learned that I probably am eligible for California Prop 60/90 benefits. But in order to qualify for this tax transfer of my current low property tax, that the house must be sold with my name on Deed. This prop would be great for me not to have to pay several thousands of dollars in additional property taxes over my remaining years. Also I have been told by both my Real Estate agent and a Tax Attorney that because I only own half of the house, I can only qualify for Prop 60/90 for half of the gross selling price. Yet on the Internet under the Tax Assessor Website, it sounds very much like multiple owners can have one person qualify for entire selling price. In other words, if my house sells for $750,000 that I can purchase another home for that amount or less rather than half which would be $375,000 as my determinate amount. So it appears that having the Trust sell house would save me money in taxes, while selling the house in my name would enable me to save property taxes for an indefinite number of years. So which way to go? I realize I know absolutely nothing about these things, but I am wondering if the Trust could sell the house to Doug and me and then we would sell house to buyer. In other words just an extra step in the normal process. I have no desire to do anything illegle or not completely on the up and up. However, I do know that there are usually several ways of doing things. I have already losts out, I assume on the $250,000 exclusion which would have saved me probably about $40,000. But if I can save property taxes and go long term on capital gains, that would be great. I hope you can understand what I am saying. I don’t know too much about this stuff so I may not be too clear. Basically, can I have both tax advantages? Thanks so much for considering this query. Sincerely, Linda Robbins Follow Ups: Need qualified tax professional Ward-CA- 4:48 PM, 08/18/03 (0) Post a Followup: Name : E-Mail : Subject : Comments: : Regarding the Dena Eula Lee Robbins Revocable Trust : : Background: Dena Robbins’ house was left in her Trust for 5 years following her death, which was August 21, 1998. During that time her daughter, Linda Robbins was able to live in the house. The trustees of the Trust are Linda Robbins and Douglas Robbins. The beneficiaries of the house are also Linda Robbins and Douglas Robbins. The house will be sold at the end of the Trust and proceeds divided between Linda and Doug. : : At the time of my mother’s death, her attorney told my brother and me that nothing needed to be done and after the five years, we could do what we wanted to as far as selling or holding the property. Unfortunately noone ever mentioned tax concequencies. My brother thought because we were the beneficiaries, we would qualify for long term capital gains. And no one told me I could not claim the $250,000tax exemption unless the Deed was in my name for two years. So much for asking my accountant. : : My brother informs me now that we are planning to sell house that I have to sign document transferring Deed out of Trust and into Doug and my name in order to sell house. I challenged this and said house could be sold while in Trust. What are tax concequencies for both ways. His attorneys didn’t know. I assume that having the Trust sell the house qualifies for long term capital gains. I don’t know at what rate, but I believe 15% is top rate. : : If we transfer the Deed into our names before selling, I assume that we are taxed individually on our proceeds as ordinary income. I assume that having the Trust sell the house would be a tax advantage for both of us as far as income tax is concerned. : : I have learned that I probably am eligible for California Prop 60/90 benefits. But in order to qualify for this tax transfer of my current low property tax, that the house must be sold with my name on Deed. This prop would be great for me not to have to pay several thousands of dollars in additional property taxes over my remaining years. : : Also I have been told by both my Real Estate agent and a Tax Attorney that because I only own half of the house, I can only qualify for Prop 60/90 for half of the gross selling price. Yet on the Internet under the Tax Assessor Website, it sounds very much like multiple owners can have one person qualify for entire selling price. In other words, if my house sells for $750,000 that I can purchase another home for that amount or less rather than half which would be $375,000 as my determinate amount. : : So it appears that having the Trust sell house would save me money in taxes, while selling the house in my name would enable me to save property taxes for an indefinite number of years. So which way to go? : : I realize I know absolutely nothing about these things, but I am wondering if the Trust could sell the house to Doug and me and then we would sell house to buyer. In other words just an extra step in the normal process. I have no desire to do anything illegle or not completely on the up and up. However, I do know that there are usually several ways of doing things. I have already losts out, I assume on the $250,000 exclusion which would have saved me probably about $40,000. But if I can save property taxes and go long term on capital gains, that would be great. : : I hope you can understand what I am saying. I don’t know too much about this stuff so I may not be too clear. : : Basically, can I have both tax advantages? : : Thanks so much for considering this query. : : Sincerely, : : Linda Robbins : : : Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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