A Limit on Widow's Gains Exclusion

By
Real Estate Agent with Buy America Real Estate Services
A Limit on Widow's Gains Exclusion


Question: My husband and I owned a house as tenants in common. He died in 2005. Now I would like to sell the house. Am I entitled to the $500,000 exclusion on my capital gains?
Answer: No. You would be entitled to the $500,000 principal-residence-sale capital gains tax exclusion only if you sold the house in 2005, the year of your husband's death.

However, presuming you inherited your husband's share of the property; you received a new stepped-up basis to market value on at least that share as of the date of his death.

Presuming you owned and occupied the principal residence at least 24 of the 60 months before its sale, Internal Revenue Code 121 entitles you to a $250,000 exemption upon its sale.

 

Information provided by Catherine Sheldrick, United General Title

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