Question

My Mom sold her house and now resides in our home. What taxes should I be aware of in this transition? She is 81.

Forum|Forum|2 years ago
September 17, 2023
1 reply
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TurboTax Deluxe Online

If she owned and lived in her home 2 of the last 5 years she can exclude $250,000 from her capital gain on the home sale. Her gain is the net selling income minus the original cost and any capital improvement costs. If her income is low enough she might also escape more of her capital gains tax.

Hal_Al

If the home had been previously owned jointly by both your parents, half the cost basis "stepped up" on the death of her husband (the entire cost basis stepped up if they lived in a community property state). This would reduce the capital gain amount.

B

Bsch4477

On Turbotax Deluxe, does my mom put the sale price which is lower than the appraisal value on the purchase price since there is no where to put the full step up basis? Example: original bought year 2000 for $100k, sold year 2024 for 700k. Enter year 2000 for $700k purchase price due to full step up after her husband passed in community property?

Proceeds is the net amount from the sale of the home. Cost basis is the fair market value at the date of the spouse’s death. The difference is the capital gain.