Thank you for the clarification. As long as this home has been used by you as your primary residence for at least 2 of the last 5 years, then when you sell the home you can automatically deduct $250,000 (or $500,000 if married filing
a joint return
) from any gain you would have. Taxes are not due unless your gain would exceed those amounts.
You would still need to report the sale even if you end up with a loss. When you sell the home, the company that completes the closing will send you a 1099-S form
at the end of the year. That 1099 form
will report the amount of money you received from the sale. The IRS
also receives a copy of that 1099 form, so for that reason they will be looking for you to report this transaction when you file your return.
You will simply list the transaction on Schedule D which is used for capital gains. You will show the amount you received for the home less your basis, less the exemption amount you are allowed because this is your primary residence. If that results in a loss then no tax will be due. But you should make it a point to include this on your return, otherwise you will end up receiving a notice from the IRS requesting you to pay tax on the full amount that was shown on that 1099 form.
If you are unable to come up with the exact amount of your mother's basis in the home, you should just make your best estimate of what her basis may have been. If your selling price on this home is less than the exclusion amounts allowed, then this will not end up being a major issue.
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Thank youCustomer and let me know if you have more questions. I am happy to help you with whatever I can.