My parents purchased a small apartment (in Bulgaria) for $5,000 in 1976. In 1997, they put it in my name through a life estate deed. I am their only child. My dad passed away in 2021. My mom continued to live in the home until July 2022, when she moved to the USA to live with me. Before leaving, she signed a document in front of a notary in which she declared that she gave up on her rights to use and occupy the property for the remainder of her life. She is 79 years old now, and I am taking care of her. In December of 2023, we sold the apartment for $60,000, with my name as the seller (buyer not related to our family). I lived in that apartment only when I was a child, and it has never been used as a rental property. Between 2000-2004, my parents and I invested some money on improvements such as air-conditioning, kitchen and bathroom modernization, hardwood flooring, insulation of walls, storm windows, etc. Unfortunately, I don’t have the records/invoices to provide as evidence. I did not owe any tax on the sale in Bulgaria.
1) How do I report the sale of that apartment? Do I qualify for the remainder interest exclusion (buyer isn’t a related party, and I haven’t previously sold an interest in that home and have never taken any exclusion)?
2) Is this considered a long-term capital gain?
3) Which date is considered as the date acquired: the date when my parents purchased the home in 1976; the date when they put it in my name through a life estate deed in 1997, or the date in 2022 when my mom signed the document giving up on her rights to use the property for the remainder of her life?
4) What is the cost basis for me as the seller?
