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  1. #11
    Join Date
    Oct 2019
    Posts
    22

    Default Re: Calculation of Taxes on Real Estate from a Trust

    Quote Quoting llworking
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    That is essentially accurate. If the trust fully distributes the cash in the same year that the sale is made, then everything will pass through to the beneficiaries, via a Schedule K1, to be included on the beneficiaries tax return. Your numbers do result in a capital loss. Unless you have other capital gains to take the loss against, however, you will be limited to taking 3000.00 a year of capital loss until the capital loss is used up. Its not a capital gains loss, its just a capital loss.
    Thanks for the info.

    When it passes via the K1, it is just to show where the money went but there are no taxes paid on that money, $355,000, in the example, correct?

    At only $3,000 a year, that's 35 years, assuming no other losses/gains, to break even with this example!!!!

    Any info on the state income tax portion, or is there any?

  2. #12
    Join Date
    Oct 2014
    Posts
    7,615

    Default Re: Calculation of Taxes on Real Estate from a Trust

    Quote Quoting pacnw
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    Any info on the state income tax portion, or is there any?
    In what state is the trust domiciled and in what states do the beneficiaries reside?

  3. #13
    Join Date
    Oct 2006
    Posts
    15,932

    Default Re: Calculation of Taxes on Real Estate from a Trust

    Quote Quoting pacnw
    View Post
    Thanks for the info.

    When it passes via the K1, it is just to show where the money went but there are no taxes paid on that money, $355,000, in the example, correct?

    At only $3,000 a year, that's 35 years, assuming no other losses/gains, to break even with this example!!!!

    Any info on the state income tax portion, or is there any?
    There are no taxes paid on the money because there was no gain, there was a loss. Therefore there was no income. Yes, it does take a long time to make use of a large capital loss.

  4. #14
    Join Date
    Oct 2019
    Posts
    22

    Default Re: Calculation of Taxes on Real Estate from a Trust

    Quote Quoting Taxing Matters
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    In what state is the trust domiciled and in what states do the beneficiaries reside?
    Trust in CA.
    Beneficiary in WA and OR.

    Quote Quoting llworking
    View Post
    There are no taxes paid on the money because there was no gain, there was a loss. Therefore there was no income. Yes, it does take a long time to make use of a large capital loss.
    Okay.

    Because the form refers to "income", I was not sure. To me there was no income generated at any point.

    Are you saying that the "income" would have been the capital gains?

  5. #15
    Join Date
    Oct 2006
    Posts
    15,932

    Default Re: Calculation of Taxes on Real Estate from a Trust

    Quote Quoting pacnw
    View Post
    Trust in CA.
    Beneficiary in WA and OR.



    Okay.

    Because the form refers to "income", I was not sure. To me there was no income generated at any point.

    Are you saying that the "income" would have been the capital gains?
    Yes, if there had been a capital gain, that would have been income. Since there is a capital loss rather than a capital gain, there is no income. Otherwise, its just a distribution from a trust.

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