Purchase or the remaining share of a primary residence

[Jsmcrae01]

Earlier this year I purchased the remaining 1/2 of the house that I have lived in for 28 years.  I purchased the property with my partner in 1996 with each owning 50% at the time.  With this purchase from earlier in the year, I now own 100% of the property. 

What tax implications are there for the 2024 tax year?    If I hold the property for a few years and later sell it, what is my cost basis.  Is my cost basis considered to be the amount I paid in 2024 or the combined amounts of 1/2 amount I paid in 1996 plus the amount I paid in 2024?

[carolineb]

Congratulations on owning 100% of your home! As far as tax implications for 2024, the only difference will depend on whether or not you itemize your deductions. If there is a mortgage on your home, you can now take 100% of any mortgage interest and real estate taxes paid on your home, unless the standard deduction is higher. 

If and when you decide to sell after a few years, your cost basis will be the total of the amount paid in 1996 plus the amount paid in 2024, along with your share of the cost of any improvements made to the home since 1996.

Keep in mind that as a single person, you are allowed to exclude up to $250,000 of gain on the sale of your home as long as you have lived in it for 2 out of the last 5 years prior to the sale. 

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