When should the sale of a house, we didnt live in, be claimed on federal taxes?

[texastrader58]

We purchesed my deceased parents house for cash in 2015 for 16,298.08 . We sold it late 2024 for 120,000. Do we need to pay any federal taxes on it for 2024. I read on this website, if its not over 500,000 (married) we dont have to pay taxes on the sale. Can anyone clarify this for us? Thank You

[SusanY1]

Can you tell us a little bit more about this?  Since you didn't live in it, was it rented? Or was it your second/vacation home?  

Only homes that are your primary residence for at least 24 months out of 5 years prior to sale are eligible for the capital gains exclusion of up to $500,000 for taxpayers filing a joint return. 

However, we need to know a bit more about the use of the home to give you the best advice.

[texastrader58]

So the property belonged to my parents, they both passed away within 6mths of each other, without a will in 2014. We paid of the mortgage balance with the bank in Aug 2015. Do not have any closing documents. We paid the taxes on the property from the time we purchased it till it was sold, even though it was still in my parents name.  The property sat empty for many many years. I let my son move into the trailer for about a year, my brother moved in for a short time, he passed away in 2023 and my son moved  out the same year. The trailer was never rented out. We decided to sell in 2023 becuase it was just sitting empty. We signed with an agent but because there was no will the property had to go thru probate, and transferred into our names, before we could sell. Because the trailer was not  livable (per our real estate agent), we sold for land only. Both of us were over 55 at the time of sale. We never lived in the trailer. Thank You

[AmeliesUncle]

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@texastrader58 wrote:

We purchesed my deceased parents house for cash in 2015 for 16,298.08 .

I read on this website, if its not over 500,000 (married) we dont have to pay taxes on the sale. 

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Can you clarify your "purchase" of the house?  Did you "inherit" the house (after both parents died) and just paid off the mortgage (or some other payment of $16,298)?

The $250,000/$500,000 rule only applies if it was your Principal Residence, so that does not apply.