Expert: Dick Dennis - 7/24/2006

Question
Hi...We have inherited a townhome that we've lived in for 20+
years. The owner passed away last year; and the estate was finally
settled this past June.

We would like to sell it. Selling prices for similar units in our
complex have been between $130,000 and $145,000.

What kinds of tax issues will we have to consider?

Answer
If you live in it as your primary residence for two more years, you would then be eligible to exclude any capital gains tax for up to $250,000 ($500,000 for a married couple who file their taxes jointly).

So, if you make it 22 years, you'll have no taxes to worry about. But if you insist on selling the property, you would have to pay a capital gains tax based on your tax bracket. Example, if you are in the 25% tax bracket, you would be taxed about 25% of the price you sell the property for since the whole value is your profit.

I recommend you consult with your tax expert (tax attorney, CPA, etc.)

Dick Dennis            dixiedee13@aol.com