How is rental handled in a final 1040 with rental going to two trusts?

efheiman · ‎12-06-2019

Client passes away in September. Rental property passes to two trusts. How is depreciation handled in year of death? Or just pick the rental up in trusts as acquired with the stepped up basis in mid year? How is rental handled on final 1040?

George4Tacks · ‎12-06-2019

The final 1040 is no different than any prior 1040. In regards to how it is handled on the trust, much more information is needed. For example: Was it in a trust before death? Did they pass through probate? You should definitely seek some professional assistance.

Answers are easy. Questions are hard!

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sjrcpa · ‎12-06-2019

On the 1040 you claim depreciation up until the date of death.

Were the rentals held in a living trust that became irrevocable upon death? If yes, the trust picks up the rentals as of date of death and begins depreciating them using the date of death value as basis.

As George mentioned, you ned the trust agreements, along with the will; probate filings, etc.

The more I know the more I don’t know.

efheiman · ‎12-06-2019

THE

efheiman · ‎12-06-2019

THE rental was in a living trust. What do I do in Lacerte to so indicate the passing in Sept? Enter in the "short year" the months to include in the 1040 return stopping any depreciation? I have the trust docs. No probate. Thank you for the answers. Great to have help.

sjrcpa · ‎12-06-2019

You can enter the short year months. Check the output. You may need to manually calculate and override the result.

The more I know the more I don’t know.