rental property owned by trust

[Catherine]

Question for a local colleague who needs to sign up here. He's wondering what to do, and I don't know.

Trustee for an irrevocable trust that has his parents (deceased in 2023) house in it.  He and his sister who will receive the house when they choose to cancel the trust are operating the house as a rental property.  The trust owns the property, not them.  If they use the house they are not paying rent to the trust.  Is it considered personal use even though they don't own it, or just a free service? 

 

[BulldogTom]

I don't have time to research, but my knee jerk is they are related parties to the owner so personal use by the owner.   But don't quote me on that.   

Tom
Longview, TX

[DANRVAN]

5 hours ago, Catherine said:

are operating the house as a rental property.

 

5 hours ago, Catherine said:

If they use the house they are not paying rent to the trust.  Is it considered personal use even though they don't own it, or just a free service? 

I am not sure what your question is Catherine, but personal use includes any day a rental is used by anyone paying less than fmv.

[Catherine]

13 hours ago, BulldogTom said:

my knee jerk

It was mine, too, but I was too busy to research it yesterday. Thank you.

[Catherine]

8 hours ago, DANRVAN said:

 

I am not sure what your question is Catherine, but personal use includes any day a rental is used by anyone paying less than fmv.

Thank you, @DANRVAN for the reply. I've passed it along. My "question" was a de-personalized quote from the email I got, and your response was just what was needed. 

[Sara EA]

A trust beneficiary is a related party to the trust.