Q: I was given my home in MI when my mother passed away. It is in my name. Do i pay cap gains when I sell it. Im a FL res.
She had the home in trust, I went up and put the home in my name. I am wanting to sell it now but I dont know how capital gains works when it was left in a trust to me,
A:
The answer is 'probably yes'. Trusts are a 'one size fits all' solution to avoid probate that like all 'one size fits all' items rarely fit just right for any one situation.
You need to take the documents, including what the tax basis of the property was going INTO the trust to a local attorney to review. MOST trusts simply take the basis of the original owner and you will pay capital gains on the increase in that basis. SOME work differently. If you had INHERITED the property, your basis would be the cash value at the date of death, and probably would owe little if any capital gains. SOME trusts ALSO work this way -- IF the property is transferred out of the trust properly. Again, if you already did this as a DIY project you may have hurt yourself.
BOTTOM LINE: Seek the help of a local real estate attorney to review the WHOLE situation and provide you guidance on how to best avoid issues. It may be 'too late' but there also may be things you can do to help 'fix' the problem!
-- This answer is offered for informational purposes only and does not constitute legal advice or create an attorney/client relationship.
I am licensed to practice in Michigan only. Please seek competent local legal help if you feel you need legal advice
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