Investor · Statewide, MO · Member since 2011 · 814 posts · 425 votes
I heard that if a person puts their primary residence in a trust and sells it for a gain, that said gain is taxable.
We all know if a person owns & occupies (qualifies) for the 250/500k tax free gain on the sale of their primary residence, but the question, is:
does holding the home in a trust disqualify you? Thanks to the brains behind the answer!
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
14y
For federal tax purposes, the sale of the trust will be treated as if made by the grantor of the trust; so yes, the grantor of the trust will get the capital gain exemption:
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
14y
For federal tax purposes, the sale of the trust will be treated as if made by the grantor of the trust; so yes, the grantor of the trust will get the capital gain exemption:
Real Estate Investor · Northeast TN, TN · Member since 2008 · 516 posts · 361 votes
14y
Originally posted by Ed O.:
I heard that if a person puts their primary residence in a trust and sells it for a gain, that said gain is taxable.
Ed, I agree with those who have responded so far about no capital gains as long as the trust is a revocable trust. If the trust is irrevocable the gain may or may not be taxable, depending on how the trust is drafted. Make sure you discuss this with your tax pro and/or attorney.