Question

Sale of My Parents' House

Forum|Forum|6 years ago
March 19, 2020
1 reply
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Hi! My parents sold their house to my brother and me for $1.00, so our names were on the deed....that was many years ago. Now, unfortunately, both of my parents are deceased. We sold their house, and I was wondering if we have to pay taxes on that money....or what do I have to do. Thanks!

ColeenD3

Maybe. It depends whether or not you used it as a main home and what the gain was.

Because you purchased it for $1, that is your basis in the home. It appears to be a 50/50 split so you could each exclude the gain if you qualify. If you don't, your gain is the sales price minus the basis.

Does Your Home Sale Qualify for Maximum Exclusion

The tax code recognizes the importance of home ownership by providing certain tax breaks when you sell your home. To qualify for these breaks, your home must meet the Eligibility Test .

How your sale qualifies. Your sale qualifies for exclusion of $250,000 gain ($500,000 if married filing jointly) if all of the following requirements are met.

You owned the home and used it as your main home during at least 2 of the last 5 years before the date of sale.
You didn’t acquire the home through a like-kind exchange (also known as a 1031 exchange), during the past 5 years.
You didn’t claim any exclusion for the sale of a home that occurred during a 2-year period ending on the date of the sale of the home, the gain from which you now want to exclude.

P

Patchi567Author

Thank you for replying! No, I did not live there. We sold the house for way under $200,000.00, in September of 2019. My Dad passed away in October, 2010, and it was, at least, two years before, that they sold their house to us for $1.00. My Mom passed away February, 2019. I read everything you said, but I am still totally confused. Thank you for taking the time!