Does the primary residence capital gains exclusion apply to irrevocable trusts?
I expect that with a revocable trust the capital gains tax exclusion (0,000 in gains) on my primary residence will still apply. Does that tax exclusion apply when I place my house in an irrevocable trust?
When I transfer that house to either type of trust, what is the cost basis, my original cost basis or the current value at the time of transfer? I want to transfer the house when I am about to reach my 0,000 limit in gains. If it takes my original cost basis, could I sell the house to a trust instead?
Edit: I have assets that I will be splitting roughly equally into a revocable trust (for heirs) and an irrevocable trust (for charity). I have a long time before retirement, so there isn't any urgency to dividing the assets, but I do feel like planning ahead allows for maximum tax efficiency.
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If you are the living grantor of trust, then you will be considered the taxable owner of the house, and you will qualify for the 250/500 exemption as long as it is your primary residence.
This is called incidents of ownership.
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