capital gains in living trust

#5 05-17-2005, 08:01 PM

"ed" <ed[at]edcosoft.com> wrote:

- quote -

> If you and your wife owned and lived in the house for 2 of
> the past 5 years, inlcuding years in trust, you get the
> $500,000 exemption. You said "I own". If you wife didn't
> own it also (or in trust) for the past 2 years you only get
> $250,000.

Both must meet the use test, but only one need meet the
ownership test for the full $500,000 exclusion. See page 9
of Pub 523.

--
Phil Marti
Clarksburg, MD

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#4 05-17-2005, 08:01 PM

ed wrote:

- quote -

> If you and your wife owned and lived in the house for 2 of
> the past 5 years, inlcuding years in trust, you get the
> $500,000 exemption. You said "I own". If you wife didn't
> own it also (or in trust) for the past 2 years you only get
> $250,000. The living trust is transparent and of no import
> to this problem except you may have given you wife ownership
> when creating the trust where she didn't have it before.
> In this case, that's good.

Note that he said he was in California, so if the deed
doesn't say, "X, a married man, as sole and separate
property," then it IS community property (assuming they were
married at the purchase date). Therefore, I don't see the
problem you suggest. [Perhaps this is just a quirk in CA's
CP laws.]

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#3 05-16-2005, 05:45 AM

"Phil Marti" <prm20871[at]verizon.net> wrote:
- quote -

> "Frankie Howerd" <frankiehowerd[at]yahoo.com> wrote :

> > I own a house - and put it in a living trust, with my wife
> > and I as trustees. Now we sell the house - can we still
> > claim the married couple $500,000 capital gains tax
> > exemption now that we don't own the house, but the trust
> > does? (I live in California)

> Yes. The living trust doesn't affect the taxation of
> anything in it.

As long as it's revocable or otherwise a grantor trust.

Stu

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#2 05-16-2005, 12:25 AM

Frankie Howerd wrote:

- quote -

> I own a house - and put it in a living trust, with my wife
> and I as trustees. Now we sell the house - can we still
> claim the married couple $500,000 capital gains tax
> exemption now that we don't own the house, but the trust
> does? (I live in California)

Yes, because a "living trust" in California is typically a
GRANTOR trust, which means that for income tax purposes, it
doesn't exist.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

#1 05-15-2005, 11:47 PM

If you and your wife owned and lived in the house for 2 of
the past 5 years, inlcuding years in trust, you get the
$500,000 exemption. You said "I own". If you wife didn't
own it also (or in trust) for the past 2 years you only get
$250,000. The living trust is transparent and of no import
to this problem except you may have given you wife ownership
when creating the trust where she didn't have it before.
In this case, that's good.

ed

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

05-15-2005, 11:09 PM

"Frankie Howerd" <frankiehowerd[at]yahoo.com> wrote :

- quote -

> I own a house - and put it in a living trust, with my wife
> and I as trustees. Now we sell the house - can we still
> claim the married couple $500,000 capital gains tax
> exemption now that we don't own the house, but the trust
> does? (I live in California)

Yes. The living trust doesn't affect the taxation of
anything in it.

--
Phil Marti
Clarksburg, MD

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

#-1 05-13-2005, 06:56 AM

I own a house - and put it in a living trust, with my wife
and I as trustees. Now we sell the house - can we still
claim the married couple $500,000 capital gains tax
exemption now that we don't own the house, but the trust
does? (I live in California)

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

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