How do you set up a trust fund for an inheritance?

Family Inheritance Trust Fund Tax Question?

• My wife and 3 other siblings inherited a home in california 4 years ago, when their mother died. The mother, however had the house in a living trust, so the home is now in the name of the trust. i have a few questions, and am hoping an accountant or real estate professional is on here and can steer me in the right direction. The house only had a 50,000 mortgage on it, and we have been paying that these last 4 years. The house was worth about 290,000 when she died, it is worth 500,000 now. Here are my questions: 1. Do we need to notify the IRS, and if so, are there any taxes involved (or as long as it is in the trust, we are okay) 2. If there is capital gains taxes involved, are they split evenly among the siblings. 3. What are the amounts of capitol gains taxes we might be looking at.? Thanks in advance, and only knowlegable people in this subject answer. Thanks

• Answer:

  http://www.irs.gov/faqs/faq-kw91.html Frequently Asked Tax Questions And Answers Keyword: Inheritance 4.7 Interest/Dividends/Other Types of Income: Gifts & Inheritances Is the money received from the sale of inherited property considered taxable income? This will answer what you may need to know. And for your question on the paying the amount on the home etc. your last one. Read that which is provided and you may wish to also check http://www.irs.gov and type in search for Basis because this my good person is what this is called. But read the other first. PS: Form 1041 does royally suck. You like paperwork? and you will have to fill it out maybe? Well I hope you love long forms. and Yes, we are an accounting firm. BC Business Services, Inc. http://www.bcbsinc.com