Hopefuly someone with more expertise than I have can enlighten me with an answer.
Scenario. NJ couple lived in home well over 5 years. House was in his name and when he died 8/05, house was put into his irrevocable trust. Widow and young child continued to live there. Widow/Trustee sold house 7/07 to move to new house in another state, closer to family. (Sale/exchange of property allowed by terms of trust document.)
Even after step up to '05 appraised value, there is a 20k gain. Question. Does the gain qualify for the exclusion? It would if the estate sold or if it was in a living trust, but I'm not sure about it being in the irrevocable bypass trust.
Thanks for any help here.