Capital gains tac

I was added to the title of my parents home. They have meet ownership and use, I meet ownership but not use. We need to sell as my mom can no longer get around the house due to balance issues. Can I claim a partial exclusion?

411

1 Best answer

Level 15

Jul 3, 2022 8:04:57 AM

@Eugene613 wrote:

I meet ownership but not use. We need to sell as my mom can no longer get around the house due to balance issues. Can I claim a partial exclusion?

You actually answered your own question; you cannot claim the Section 121 (home sale) exclusion because you do not meet the main home use test.

See https://www.irs.gov/taxtopics/tc701

Level 15

Jul 3, 2022 8:04:57 AM

@Eugene613 wrote:

I meet ownership but not use. We need to sell as my mom can no longer get around the house due to balance issues. Can I claim a partial exclusion?

You actually answered your own question; you cannot claim the Section 121 (home sale) exclusion because you do not meet the main home use test.

See https://www.irs.gov/taxtopics/tc701

Level 15

Jul 3, 2022 8:05:08 AM

No, since it was not your primary residence.

Level 15

Jul 3, 2022 9:33:43 AM

consult a real estate lawyer. you may want your name taken off the title. since they meet the ownership and use test they would qualify for the full $500,000 exclusion.

if that can't be done or the lawyer advises against it your parents would still qualify for the exclusion on their portion of the sale. you would not.

Level 1

Jul 3, 2022 10:05:23 AM

Thanks. So any tax is only on my portion?

Level 15

Jul 3, 2022 12:09:22 PM

As has been stated, contact a local attorney that has experience in federal tax law, real estate, and estates/trusts.

There is a possibility that you wll not have to report any gain if this scenario is handled properly.

Why sign in to the Community?

Capital gains tac