How is the money taxed on the sale of a home through a living trust?

Question

I am on the title of my mother's home through a living trust. Due to her deteriorating health we must sell her home. I will need the proceeds from the sale of her home to pay for her new rental situation. How is this money taxed and where would be a good place to keep this money as I need certain amounts each month?

Answer 1

Iif your mother bought the house for $150,000 20 years ago and sold the house before she died at $350,000, the basis would be the value of the home when she bought it years ago. If you and your sisters take possession, the basis would be the new value of $350,000.

Though the house is already owned by a living trust, you may also want to talk with the estate planning attorney about using a Qualified Personal Residence Trust (QPRT) in which to hold the property.

FindLaw.com gives a very good laymans explanation of how a QPRT works:

    A Qualified Personal Residence Trust (commonly called a "QPRT") is sometimes called a way in which you may give your home away and live in it, too. In reality, it is a way of transferring your home to another party (usually children) at a reduced transfer tax cost  Under a QPRT, your home is transferred to the trust and you retain the right to live in the home for a specified period of time. At the end of the period, you may provide that the home be distributed to your children or to a trust for them.

After you sell the property a good safe place to put your money would be in a Guaranteed Income Stream Annuity,

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Answer 2

Talk to the attorney who set up your living trust. He or she should have (or be able to lovcate) all the necessary information needed to answer your questions.