QUESTION
How much capital gain do I have to pay so I would know how much to ask for the house?
Asked on May 30th, 2013 on Taxation - Colorado
More details to this question:
My father died four years ago and never put the house in my name. I will be transferring the title of the house into my name once the sale is closed. I had a tenant for the last four years.
2 ANSWERS
Probate Attorney serving St. Louis, MO
at
Edward L. Armstrong, P.C.
Update Your Profile
It depends. Is this house your principal residence? If you are married the first $500,000 of gain would not be taxed. If you are not married, the first $250,000 of capital gain would be free of tax. There are some "rules." Check out Section 121 of the Internal Revenue Code.
Answered on Jun 04th, 2013 at 9:41 AM
Your capital gain is calculated this way: any gain in the property prior to your father's death goes away. This is because the house receives a step up in basis to the fair market value as appraised on the date of your father's death. You are responsible for any gain from the date of your father's death forward.
Answered on May 31st, 2013 at 11:03 AM