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No. Because you owned the property jointly, with rights of survivorship, you have what amounts to a qualified joint interest. Therefore, you receive a step-up in basis. This analysis can get somewhat complicated. Thus, here is IRS guidance on how to determine the basis in property held as JTWROS when one of the joint tenants has passed away.
Qualified Joint Interest
Include one-half of the value of a qualified joint interest in the decedent's gross estate. It doesn't matter how much each spouse contributed to the purchase price. Also, it doesn't matter which spouse dies first.
A qualified joint interest is any interest in property held by married individuals as either of the following.
• Tenants by the entirety.
• Joint tenants with right of survivorship if the married couple are the only joint tenants.
Basis. As the surviving spouse, your basis in property you owned with your spouse as a qualified joint interest is the cost of your half of the property with certain adjustments. Decrease the cost by any deductions allowed to you for depreciation and depletion. Increase the reduced cost by your basis in the half you inherited. Farm or Closely Held Business
Below is a link to IRS Publication 551 from which the above information was obtained.
Even if you eligible for the capital gain exclusion, you still need to include the sale of your home on your tax return.
Basis of Assets at page 10.
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