"After Death
If, after your death, your trust transfers your home to a beneficiary, that individual becomes responsible for any taxes due. The real estate inheritance is not taxable; the Internal Revenue Service does not consider it income. If your beneficiary sells it, however, he becomes personally responsible for capital gains tax on the proceeds. His tax basis is not what you initially paid for the property, but what it is worth at the time of your death, so he may not realize any significant capital gains. This is particularly true if he sells relatively soon after he inherits". I've been doing quite a bit of reading on internet, and I see the above quote in several places on Irrevocable trusts. I just wanted to see what the folks here had to say. I plan on calling the lawyer who drafted the trust.