Tax Law (Questions About Taxes)/Home sale in Trust


The Trustee sells the decedents home in the Trust. The trust then distributes the proceeds in a K1 to the beneficiaries. How does the beneficiary show that K1 income on his 1040 return so it shows his step-up basis so it won't be taxable to him? (House was sold at FMV directly after death). Does the Trust have to show step-up basis or is the distribution enough to keep the Trust from being taxed?


Thanks for your question.

Basically, follow the instructions on page 2 of the K-1 which tells you where to put each amount.  You will show the sale of the house on Form 8949 and show the amount from the K-1, then show the cost basis on the proper space of the 8949.

Hope this helps.

John Stancil, CPA

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John Stancil, CPA


I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at I also offer seminars and consultations to churches and clergy on their tax issues at Also visit my blog, I am listed on Tax Connections at Prepare and file your own taxes at


I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

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