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Richard, Tax Attorney
Category: Tax
Satisfied Customers: 53673
Experience:  29 years of experience as a tax, real estate, and business attorney.
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My parents signed over to my sister and me their house with

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My parents signed over to my sister and me their house with their having lifetime use in 1992. Dad died in 2003 and Mom died in Feb 2008. I moved in to take care of Mom in April of 2004. I had no other residence at that time. I finished up what I could do in Oct. of 2008 and moved back to Texas. We got the house sold in June of 2010. Can I use my exclusion (I'm 71) on this sale? Do I meet the 2 year test? Cost basis for the house when Mom died was $62K. It was sold for 63K and the proceeds split between my sister and me. Do I have any tax liability? Thanks

Good afternoon. You would not qualify for the 2-year rule. Since your mother gifted the property in 1992, the value at her death is irrelevant. The applicable number is XXXXX her basis in the property was plus any improvements you made subsequently. Then you would owe capital gains tax on one-half (your share) of the $63,000 less the basis as calculated as previously mentioned. Your capital gain rate is zero is you are in the 10% or 15% marginal income tax rates. Otherwise your capital gain tax rate is 15%.



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Customer: replied 5 years ago.
I believe the marginal income tax rate would apply then the 1/2 share from the sale does not have to be included on my tax return? No schedule D to fill out?

You would still want to complete Schedule just will not result in any capital gain tax.
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