sale of second home

[golfbeach]

I am 97 years old and just sold my second home for a profit.  Do i get any special tax treatment on this sale?

[Carl]

Unfortunately, your age gets you no tax breaks or any special considerations.

However, if the property you sold was your primary residence for at least 2 of the last 5 years you owned it (731 of the last 1826 days you owned it) counting back from the closing date of the sale, then you qualify for the capital gains tax exclusion.

That allows you to exclude up to $250K if filing single, or $500K if filing MFJ from your gain on the sale, from being taxed.

Assuming the property you sold was never used in business of any type (rental, home office, etc) then you report the sale in the "Sale of Home (Gain or Loss)" section.

[golfbeach]

my wife and i bought the property, she passed away a few years ago, do i still use the original basis or do i increase the basis for her half when she passed?

[HelenC12]

If this second home was not your primary residence for two of the last five years, you're not eligible for the $250,000 (single) or $500,000 (Married filing jointly), exception. To enter the sale of you primary residence, see Is the money I made from a home sale taxable?

However, you may be eligible for capital gains rates if you held the property for more than one year and it was not your primary residence. See Where do I enter the sale of a second home, an inherited home, or land on my 2021 taxes?

TurboTax will calculate if you have a gain on the property and the related income taxes (if any). Simply enter the information into TurboTax.

[golfbeach]

I see, I will qualify for capital gains treatment.  My question now is do I use the original cost when my wife and I purchased the property jointly, or do I increase the basis to reflect the value of her ownership when she passed and the property was solely owned by me.  thanks

[RobertB4444 · Accepted solution]

You will.  You will enter the cost basis as 

50% of what you originally paid for the home and

50% of the value of the entire property on the date of her death.

Plus the cost of any major improvements that you made while you owned it.

[golfbeach]

thank you so much.