Date: Tue, 31 Jan 2006
My father transferred his home to my sister and me by quit claim deed when our mother passed away in August, 2005. The home is paid for. I would like to sell my share to my sister, leaving her as the sole owner. Would I have to pay taxes on the sale proceeds? Does the two-year rule apply here?
Date: Mon, 06 Feb 2006
The two-year rule only applies when the home is your principal residence. Even if you did live in the residence, itís too soon to qualify, unless you have an "unforeseen circumstance."
Find out from your father what the tax basis for the residence was. At least part of the basis should have been adjusted as of your motherís date of death. Your father might need some help from an accountant or attorney to determine this. It may be the gain is much smaller than you think it is.
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