Selling Mom’s house – no tax
Need the info selling Mom’s house when she passes away. My cable went out and didn’t hear your answer.
Terry Says
Instead of selling before death, when capital gains might apply, it might make sense to wait until after death if the money is not needed for care.
Here are the rules.
While alive and the primary residence, when the house is sold, $250,000 of gains from the cost basis (purchase price, plus improvements) is excluded from taxes. And if its a married couple filing jointly, they can exclude $500,000 of gains.
But if the heirs sell after death, their NEW cost basis is the value on date of death. That means the heirs can sell fairly soon after death and probate, and there would be no capital gains tax. Proceeds would be distributed tax-free.
