Home Selling in Los Angeles>Question Details

Baseballdad, Home Seller in Los Angeles, CA

Selling your half of a house a the other half owner. when the house is in a trust and you taking a loss?

Asked by Baseballdad, Los Angeles, CA Wed Oct 13, 2010

So, we are selling our half of a house that is in a trust, To the other trustee. The house has loss about half of the value that it appraised for when it was inherited. So we are taking a loss on the value. We need to know if there is a specific way we need to sell the house to show that it is a loss. Does it need to come out of the trust or can it be sold in the trust??

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Jeri Creson’s answer
Sounds a little complicated for an open forum without some more specifics on your individual situation...so I'm going to punt, defer to a tax professional. The professional I would consult on this is a tax advisor who can advise you on tax law, capital gains, figuring your tax basis with specific information regarding trusts. Tax law can be very complicated. This is a situation where the price of a consultation is an investment in your future.

Good luck to you - and kudos for doing some homework on this first before leaping and just hoping for the best!
1 vote Thank Flag Link Wed Oct 13, 2010
Dear Baseball,

I have an opinion on this, but you know what they say about those!
Since none of us are Trust Lawyers, or CPA's my best advice is that you consult with a really good one to get an accurate answer and good direction for this sale.
0 votes Thank Flag Link Fri Dec 28, 2012
The answer is fairly simple. You can not sell a house to a co-trustee and show a loss within the trust. You would need to sell the house to an entity outside your trust to show the loss for your current trust.
0 votes Thank Flag Link Sat Dec 8, 2012
Hello Baseballdad,

I would consult a Trust Attorney. If you inherited you probably didn't pay any taxes on it. Check with your Trust Attorney.

Monique Carrabba
The Carrabba Group
Keller Williams Hollywood Hills
(323) 899-2900
0 votes Thank Flag Link Wed Oct 13, 2010
Hi Baseballdad,

I agree with and second Jeri's answer below - you definitely need to consult with a tax professional to be sure that it is structured correctly. Depending on your personal financial situation and that of the trust, one way may be more tax advantageous than the other, and only a tax professional will be able to tell you for certain which method of transfer would work best for your personal situation. The best advice an agent can give you would be to consult with a tax professional.

Good luck with your sale of the half interest - hope everything is smooth and tax-friendly for you!

John Barry
DRE #01856079
Coldwell Banker Residential Brokerage
Cell: 323-810-7976
Email: john.barry@coldwellbanker.com
Facebook: http://www.facebook.com/RealtorJB
Twitter: @RealtorJB
0 votes Thank Flag Link Wed Oct 13, 2010
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