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Enter on 2025 1041 Sale of Inherited personal residence

Forum|Forum|6 months ago
December 30, 2025
2 replies
17 views

Do I show on Sch D, under Exception Smart Worksheet, Ln3 -8, under LT?

If correct, what single-letter adjustment codes are they referring to? K-1 line items?

Called ProSeries, they have no answer, could be this form is not completed yet?

Or is this another location this transaction is to be reported?

Thank you for your time and Happy New Year!

ProSeries Professional

Best answer by dude7707

I don't do trust work, but does the answer here depend on the type of trust?

In an earlier comment this fact was offered:

"The personal residence which originally was owned by the children's parents and titled in the name of the their irevocable trust."

Doesn't this hinge on how we correct the typo? Remove the "i" and we're good to go. Add another "r" and there might not be a step-up (but there still could be if the irrevocable trust qualifies as a grantor trust...)

Are we having fun yet?

Happy New Year!

Note this is an revocable trust.

So to confirm after all these additional facts, the correct reporting of this transaction is:

1. Basis is FMV of DOD of SP - 8.16.24

2. Report sale on 2025 1041 - Sch D - Report on Schedule D/8949 as if it was a non 1099-B stock sale

Thank you all for your prompt replies and time on the last day of 2025!

Happy New Year!

sjrcpa

Level 15

Whose personal residence? Decedent's?

Is the estate the seller? An estate does not have a personal residence.

It is long-term.

What kind of exception do you think you need?

And yes the forms are not ready yet.

The more I know the more I don’t know.

D

dude7707Author

Level 5

Whose personal residence? Decedent's? - The personal residence which originally was owned by the children's parents and titled in the name of the their irevocable trust.

Is the estate the seller? An estate does not have a personal residence. This is not an estate, this is an trust as referred to above, which sold the personal residence.

It is long-term. - Y

What kind of exception do you think you need? - I'm not looking for an exception, just where to report the sale of the trust owned residence as noted above.

And yes the forms are not ready yet. - That's what I assumed also....

Thank you for your prompt reply and follow up Q's.

Does this help or do you have additonal Q's?

The more I know the more I don’t know.

sjrcpa

Level 15

Report on Schedule D/8949 as if it was a non 1099-B stock sale. Basis = date of death FMV. If it was a joint trust you have 2 date of death values, 1/2 for each decedent.

FYI 1041s can be for a trust or an estate. You didn't say which in OP.

The more I know the more I don’t know.

BobKamman

Level 15

That's a pretty neat feature, being able to designate your own answer as the best one. I'll have to start doing that myself. Meanwhile, this is another example of three blind people trying to describe an elephant. Many joint trusts in community property states featured a provision that put the (generally 50%) assets of the first to die in an irrevocable trust. The other half remained in a revocable trust for the survivor. This was done to avoid estate taxes, and/or to protect the interests of one spouse's beneficiaries (like children from previous marriage) when they were not the same as the other spouse's. The assets of the first-to-die got stepped up basis once, and not again. This could make a big difference if the widow survived 20 years.

Often, grantors/trustees had no idea what they were signing, and they ignored the requirement to split the trusts. So did their tax preparers, and the people trying to answer questions without seeing the trust.

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