Taxes for property transferred from a trust to an individual...?
I will soon be recieving some real estate from a trust my deceased grandfather set up for me and my siblings many years back. Will I have to pay any federal taxes on that property? Do the same rules apply to this as if it were an inheritance like at the time of death with the estate taxes and all? I don't plan on selling the property now, it is just going to be put in my name alone instead of in the trust. Will I have to show that as some sort of income for me on my personal taxes or pay an inheritance/ gift/ or estate tax? Also, will we have to pay like a capital gains tax using the difference b/w the value of the land at the time the trust was created and now? Thanks for helping me with this!
Public Comments
- The trust is a separate entity for tax purposes. It pays its own taxes, so any that are due must be paid from the proceeds if a taxable event is triggered, like selling the property.
- The answer depends on a lot of info not provided by you. But in general. the distribution from a trust does not trigger income or income tax liability. It's just a tax free distribution. Something you will DEFINITELY need is to know your basis the the property. Someday maybe you will sell it and then you will have to compute your gain or loss. You can't do that without knowing your basis, and basis begins with the distribution itself. Hope that help.
