Capital Gains Tax
I sold my Dads home last year. What can I deduct to avoid paying Capital Gains Tax?
Terry Says
Is your Dad still alive? If so, gather all the information on the original cost of the home, plus any repairs/improvements over the years, and that is his cost basis. He gets to exclude $250,000 of gains over the adjusted cost basis.
If your dad passed away and you inherited the home, then YOUR cost basis is the value on the date of his death. If you sold it within 6 months, there is likely no capital gains on the proceeds. It is an inheritance, and the inheritance gets a ‘stepped-up’ basis on cost.
Consult your tax advisor.