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My friend who is 75 years old is selling her home. She has

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My friend who is 75...
My friend who is 75 years old is selling her home. She has lived in it for the last 47 years. The house has been paid for forsome time. Does she have to pay capital gains on the money she gets? She is giving some to the children, under the limit of $13,000. Does she have to pay taxes on that money or do you kids have to pay taxes?
Thank you for your help.
Submitted: 8 years ago.Category: Tax
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Answered in 6 minutes by:
10/1/2009
Tax Professional: Bill, Enrolled Agent replied 8 years ago
Bill
Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3,153
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As long as she has used the home as her main home for at least 2 years in the 5 years preceding the sale, then she can exclude from her income up to $250,000 (assuming her filing status is single) of the gain. If she then makes gifts to some of her children under the limit of $13,000 each, then she does not have to report the gifts to the IRS. The children will not have to report the gifts as income as gifts (regardless of the amount) are not considered taxable income to recipients.

 

http://www.irs.gov/businesses/small/industries/article/0,,id=98921,00.html

 

 

 

Bill
Bill, Enrolled Agent
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