Capital Gains

Forum|Forum|3 years ago
November 16, 2022
1 reply
29 views

My Aunt passed away October 2021. I sold her house this year. Can her estate claim the one time tax break and not pay capital gains tax on the sale of the house. We live in Texas.

Best answer by Anonymous_

The home sale exclusion does not apply in this instance.

Rather, the gain (loss) would be measured by the difference between the sales price (less selling expenses) and the basis (typically the fair market value on the date of death of the decedent, your aunt).

See I.R.C §1014

Anonymous_Answer

Level 15

The home sale exclusion does not apply in this instance.

See I.R.C §1014

mjwoo94015

Level 2

Thanks for your response. I happen to agree with your conclusion but have not found any authority for this position. Do you have any authority or case law that you are relying on other than the plain reading of the law?

DMarkM1

Level 15

I don't believe there would be any case law only statutory law since the provisions posted by @R-SchuleCPA never came into play. If you follow the notes in the law (here) and read the referenced Public Laws and amendments you will find that subsection (d)(11) which was originally (d)(9) was enacted in 2001 but was only to affect property of decedents dying after Dec 31, 2009. However, on Dec 17, 2010 Public Law repealed subsection (d)(11) formerly (d)(9) for decedents dying after Dec 31, 2009.

As @Anonymous_ states the using the step up basis on the date of death is the correct method.

@mjwoo94015

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