Legal Question in Tax Law in California

Family Trust and Tax Laws

We own property as part of a family trust, the trustor passed away last year. We have sold his personal residence, it is closing escrow soon. There are 5 siblings who are to split the proceeds, is there capitol gains taxes that need to be paid. Also, there is another piece of property, raw land, we would like to sell that too. What are the tax laws regarding property sold that is in a family trust?

Asked on 3/22/04, 7:51 pm

1 Answer from Attorneys

Ken Koenen Koenen & Tokunaga, P.C.

Re: Family Trust and Tax Laws

First of all, you need to read the trust for all of its terms. I am asuming that the value of all the land is not more than $1.5 million. If that is the case, then chances are you have no estate taxes or capital gains tax. You need to set up a taxpayer ID number with the IRS for the trust. At the death of an individual, the basis of the property accelerates to the value on the date of death. If the property has appreciated since the date of death, there might be a slight capital gains tax on the sale.

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Answered on 3/22/04, 8:02 pm

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