Selling property... Sister can't report sale to IRS this year.

[Jonathan Ward]

Hi,

My sister and I rent a property that's in a Revocable Trust. Our tenants have given notice and will be out by 5/1. Being an 87 yr old home, I would like to sell the property. She and her husband have been hit hard by Covid and have had to convert some of their IRA retirement savings to cash this year. Unfortunately I just learned that for tax purposes, they can't absorb a windfall payment (about 275k) on their 2022 tax return. It would invoke large tax penalties given their recent financial moves.

Is there a way the home can be sold this year, and they can put off reporting their 1/2 of the sale to the IRS until next year? Maybe putting their proceeds into a temporary "holding" account, escrow or banking method?  

I know it sounds strange but I swear it's all legit. We can get top dollar for the home this year and as 1/2 owner, my financial security is affected by this. In fact, I'm currently doing exterior renovation to the home myself at no charge to the Trust to improve curb appeal.

Thanks for any suggestions