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Does my mother need to pay taxes on the sale of her home?

June 15, 2005


From:  Cindy
Date:  Fri, 6 May 2005

My mother sold a house in California and moved to Georgia and bought another house. Does she need to pay estimated taxes for the sale of residence?

Answer

Date:  Mon, 06 June 2005

Hello Cindy,

Assuming this is a qualified sale of residence, your mother should be able to exclude $250,000 of gain from her taxable income. She will have to file a California income tax return to report the transaction if there is any taxable gain.

She can pay her 2005 estimated taxes based on her 2004 income tax returns, and pay the balance of the tax on April 15, 2006. The next installment is due June 15, 2005. See the instructions for Form 1040ES at www.irs.gov and Form 540ES at www.ftb.ca.gov.

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.

Does my mother need to pay taxes on the sale of her home?

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