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Will my Mom need to pay capital gains on her home sale?

February 26, 2007


From:  Wonda
Date:  Wed, 03 Jan 2007

My mother was widowed two years ago. She has lived in her residence for 30 years. If she sells her home for $300,000 in Alabama, will she have to pay any tax for the capital gain?

Answer

Date:  Wed, 31 Jan 2007

Hello Wonda,

Since your mother has lived in the house for more than 30 years, she qualifies for a $250,000 exclusion for the sale of a principal residence.

If her husband owned a portion of the residence, she may be entitled to a basis adjustment for the inherited part of the residence, which could eliminate any additional gain.

I suggest that she consult with a local CPA who is familiar with these rules when preparing her income tax return for the year of sale.

Good luck!


Mike Gray

We have more answers to frequently asked real estate tax questions! We also offer up-to-date information about new tax real estate tax developments in Michael Gray, CPA's Real Estate Tax Letter.

IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained on this website was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.

Will my Mom need to pay capital gains on the sale of home?

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