Senior taxpayer , who is single , creates a residence trust. The trust owns the house but the taxpayer has the right to live in the house during her lifetime. Taxpayer has lived in the house for 25 years.
Prior to death the taxpayer decides to relocate and sell the house in the residence trust.
The sale of the house would be reported on the trust 1041.
Is the section 121 exclusion of $250,000 lost due to the creation of the trust ?