Morton
Level 3

A rental inside a trust was sold in January of 2025.  The property was owned by two trusts - one for husband and one for wife.  Botjh trusts had the rental property in the 2023 and 2024 returns and the program did a great job of dividing up things.  Now with the sale, how do I put the sale information into the program.  I know I start with Screen 22.  However, one trust owns different percentages of the property with different basis.  How do I enter the sale information:  sale price, expensis, basis, etc.  Will the program divide up the full amounts on the 4797 or should I do all of the divisions and enter those on each return?

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BobKamman
Level 15

These were not grantor trusts, that are disregarded entities for tax purposes?

Morton
Level 3

These are both irrevocable trusts as both grantors have passed away.

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Morton
Level 3

If I put the sale information in Window 22,  the sale amount carries to the 4794 correctly..  However, I put in the correct figures for the basis, but it seems that since in 2023 and 2024 the income, deprecation, deductions were for only 54.21% of the full amounts that the basis is too low.  As a result it seems that the basis is now being reduced by the 54.21%.  Can anyone assist with this?

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sjrcpa
Level 15

Most likely the trusts get a step up in basis to dod fair market value.

Depreciation claimed by the decedent(s) becomes irrelevant.

You're preparing 1041s, right?

Or did the trusts become irrevocable in 2023/2024 and the trusts claimed depreciation on 1041s?


The more I know the more I don’t know.
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Morton
Level 3

The trust became irrevocable upon the death of the second spouse in 2023.  Hence I did both the 2023 and 2024 with the rental as the tenants had a two year lease.  Yes I prepared both the 2023 and 2024 as a trust for both trusts as the deceased had A/B trusts since they never updated their trusts when the law changed.  Yes, there was depreciation on each of the returns based on the percentage of ownership for each trust.

 

One trust has a step up basis upon his DOD and the other has the step up on her death in 2023.  The oldest trust has a 54.21% interest in the rental and the wife's has 45.79% interest .  I put all of the information in the program through Window 27.  I have all the figures divided since the basis is different for each and know what the answer should be on the 4794 and 1041.  I just can't get the program to property put in the figures I have entered.  I am assuming this may have something to do with the fact that the rental has the percentages listed above and is applying them.  

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sjrcpa
Level 15

Have you entered each trust's actual basis in the software?

If yes, get rid of the % indicator.

And enter each trust's share of the sale price and expenses of sale.


The more I know the more I don’t know.
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Morton
Level 3

Yes, I had entered everything in the software.  What I finally did is remove everything regarding the sale.  I then put everything back in and removed the percentage of ownership of the assets.  I finally got all of the correct answers.  I entered everything through Screen 27 and did not use the bulk sale.  I followed the Lacerte instructions for entry the first and second time.  

 

I cannot explain why this has been such an problem as I had done all of the collection of information and all of the math on paper before I opened the program so I knew what every amount should be and what the bottom line should be.  I followed the instructions, but somehow something wasn't right the first time even though I couldn't find out what that was.

 

Anyway, I have one trust done with the right information so I will go to the second trust and hope that I don't have issues there.  Thank you for your concern and suggestions.  I really appreciate the the Lacerte community is so good at helping.