When does my cost basis of the trust for tax purposes begin? 7 Answers as of June 17, 2011I was named Beneficiary and Successor Trustee in a revocable Trust exsecuted by my Mom in 2000. She died in July 2010. Due to concerns with my sisters, I was not able to execute and record a Quit-Claim Deed to myself with their signatures attached until June 2011. When does my cost basis for tax purposes begin - when Mom executed the Trust, when she died, or when I recorded the deed?
Theodore W. Robinson, P.C. | Theodore W. Robinson
While I'm not entirely certain, it would probably start when you were entitled to receive it from the Trust. That's because otherwise you could hold off on taking it into your name indefinitely and save all the taxes due on it until them.Consult with an estate attorney who knows the tax code. Good luck.
Answer Applies to: New York
Steven J. Fromm | Steven J. Fromm & Associates, P.C.
Since this was a revocable trust, the assets in such trust are included in her taxable estate. As a result, the date of death value for the asset is your basis. So whatever the estate tax return or inheritance tax indicated as date of death value, that would be your tax basis. Also, your holding period includes your mom's holding period via the so-called "tacking" rules.
Answer Applies to: Pennsylvania
Dorot Law, PA | Datan Zvi Dorot
Generally, for federal tax purposes, a beneficiary of a bequest (which is the case where property is transferred through a revocable trust at the death of the grantor) receives the property with a date of death cost basis. An alternate valuation date can be applied, which would be the equal to the value of the property 6 months from the date of death of the grantor, at the behest of the executor/trustee. In your case you will be able to use a cost basis equal to the value of the property on your mother's date of death, or the alternate valuation date, 6 months later. I strongly suggest that you consult with an attorney or CPA to make sure that there are no other facts that may come into play in your case. You have not provided ALL the facts, and therefore you should not rely on this analysis. IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this document is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing, or recommending to another party any transaction or matter that is contained in this document.
Answer Applies to: Florida