Hello,

Not quite sure if I’m doing this right.

The trustee sold some real estate (raw land & residential house) properties 2 years after the decedent’s death.

The agreement says the proceeds should remain in the trust and be equally divided to his children. Proceeds from the sale were still sitting in Trust’s bank account waiting for distribution.

To get the basis of the property, I'm using the acquisition cost plus capital improvements less depreciation.

Would like some sort of clarity. Should this qualify for a step-up basis at the time of death? Fingers crossed, this would lower my capital gains tax.

The gross estate is less than $3 million. 1041 returns were never filed. 

Would love to hear from y’all, big thanks!