Hi Pros,
My client is the original trustee, the child of the grantors and the primary beneficiary of the grantor trust. The grantors passed away in June 2016. The trust held real property, which was the primary residence for the client.
In June 2018, the trust was dissolved. In July 2018, the property was sold.
There will be a gain from the step up basis in 2016 to 2018 of $100K.
My question is, is the client considered to own the property since June 2016? If so, since he lived and maintained the property as his primary residence, is he qualified to exclude gains on the sale of this property for up to $500K if he is filing joint tax return (assuming he also meets other requirements)?
We are trying to find out if this child of the trust. Now he is an adult of course, would qualify for the sec 121 personal home exclusion since he has lived in the home, which was sold. But the home was owned by the trust as of July 2018. He was the beneficiary of the trust though.
I can provide more information if needed. Thank you.