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J. Warren
J. Warren, Attorney
Category: Estate Law
Satisfied Customers: 2242
Experience:  Experience in estate planning including wills, trusts and succession planning.
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My parents wanted to give me an inheritance before their

Customer Question

My parents wanted to give me an inheritance before their death, they deeded their home to me in 2005 , from 2005 I did upkeep and paid the property taxes they lived there rent free until 2014 both had passed away , I sold the home in 2015 I had selling expenses as well paint, ads in newspapers, signs, old carpet removed, window repair termite insp. etc... how do I determine capital gains tax if any
Submitted: 1 year ago.
Category: Estate Law
Expert:  J. Warren replied 1 year ago.

Hello and welcome to JustAnswer. Please note:This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms.

My condolences on the loos of your parents. If the property can not be claimed as your primary residence, the capital gains is calculated by the purchase price (sale price) less on the donor's adjusted basis at the time of the gift (what was paid for the property increased by capital improvements your parents paid for prior to gifting the propert) less the cost of a sale (real estate fees, improvements, repair). For example, parents buy a house for $50,000 and over years put in an additional $50,000 in improvements (i.e. an addition, new roof, fence, plumbing, etc), then gift the house to a son during their lifetime. The son has a basis of $100,000 in the property. If son then puts in $100,000 worth of improvements and spends $50,000 for the sale of the home with proceeds of $500,000 for the sale : the capital gains is based on sale of $500,000 less adjusted basis of $250,000 which equals a capital gain of $250,000.

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