You don't owe anything since it's not your house any more.
Her cost basis would be $250K. That would mean a capital gain of $250K. If she lives in the home and uses it as her main residence for at least 2 years, she will probably qualify for the capital gains exclusion meaning the first $250K of gains is tax free. Any gains over $250K is taxed at the long term rate of 15%. If she sells in less than 2 years, she would owe tax on the full amount of the gain unless she qualified for one of the partial hardship exclusions. Or if she is married filing jointly she may be able to exclude more than $250K of the gain. It really depends on her circumstances. <a rel="nofollow" target="_blank" href="
https://www.irs.gov/uac/newsroom/top-ten-tax-facts-if-you-sell-your-home">https://www.irs.gov/uac/ne...>
