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You likely mean the old law
Before May 7, 1997, the only way you could avoid paying taxes on your home-sale profit was to use the money to buy another, more-expensive house within two years. Sellers age 55 or older in additional could take a once-in-a-lifetime tax exemption of up to $125,000 in profits.
The Taxpayer Relief Act of 1997 replaced these options with a better one: you can make tax-free profits of $250,000 (or $500,000 if your filing status is married filing jointly) every time you sell a home if you owned and used it as a primary residence for at least two years out of last five years before the sale.
If the property was inherited - there is stepped-up basis - fair market price of the property at the time the decedent died - that means if the property to be sold shortly after - it is likely will not have any capital gain or a very little.
this house was not a prmary residence, so does this mean he has to pay taxes on it? He is 63 years old
Was the house received as a gift or as an inheritance?
When did he received the house?
Was it used as a rental property?
the house was bought byhim and his sister. It was a living trust.
May of 2007
No it was not used as rental property
So your husband and his sister purchased the house in May of 2007 - correct?
If so - the purchase price - assuming it was purchased at fair market value - is considered a basis.
The basis should be adjusted by purchase expenses and improvement expenses.
It is not clear how the property was used... - as a second home - I assume....?
The gain would be = (sale price) - (adjusted basis ) - (selling expenses).
If you provide more information - I may help you with estimation.
As the property was purchased a little more than a year ago - there should not be a large gain.
Based on information provided - that gain will be taxable at reduced rate - not more than 15%.