Other Tax Questions
Questions and comments on other topics covered in Fairmark.com, such as UTMA accounts, and any tax questions that don't fit our other categories.
Trust and Inheritance
Posted by: pmdonca, October 27, 2017 07:54AM
Why would one get a trust if the assets do not get a stepped up basis? What kind of assets do get the step up in basis and what kind of assets do not get the step up in basis while in a trust?

Also what if the primary residence is wrapped into the trust, does this mean the primary residence does not get a stepped up basis?

If that's true. then it is probably better for people to sell their home now and get the $250k gains tax free (if single; if married $500k).

Let me know what you all think. Thank you.

-Phil

Re: Trust and Inheritance
Posted by: triad, October 27, 2017 09:02AM
Where did you get your misinformation?

If I set up a living trust and then die, the trust assets are part of my estate and currently get a stepup (or stepdown).

Re: Trust and Inheritance
Posted by: Spirit Rider, October 27, 2017 10:29PM
This is not necessarily misinformation. This is dependent on the type of the trust.

An irrevocable trust that moves the assets out of a persons estate do not get a step-up at death.

Re: Trust and Inheritance
Posted by: Sven, October 28, 2017 01:01AM
Thanks for fleshing out the other side of the trust universe, Spirit Rider. If you have a specific objective in mind you might go one way or go the other. Each kind of trust has tax ramifications and sometimes family dynamics trump tax considerations. Trusts are not very good candidates for DIY work. Neither are wills.



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