Expert: Dick Dennis - 6/10/2007

Question
My mother found out she had terminal cancer in March of 2006, she died May 19, 2007. She didn't have a will and signed over her house to me using a quit claim deed, because honestly we didn't know what else to do and we didn't know how long she would make it because she was very sick at the time. I am her only child and my father passed away in 1996 and he left everything to my mom in his will. I have to file my moms taxes for 2006, she was to ill to do it herself and had filed for an extension. I was just informed that we should have had the house appraised when she signed it over to me. I had no idea you had to do this and it is very upsetting. Is this true and if so what problems am I going to have since I didn't do it last year? I am going to have the house appraised before I file her taxes for 2006. What taxes will be owed, I don't think the house will appraise for over $200,000.00. I have been living in the house since my dad passed, since my mom died I am really wanting to sell the house and move. What are going to be my tax implication from selling and do I still get the tax credit of $250,000.00 if I stay in the home for two years after it was signed over? I hope I explained everything good enough. I have never had to deal with any of this and I am very ignorant to what is involved. Thanks so much for your time.  

Answer
Based on what you have said, Sandy, it appears you are indeed protected by that $250,000 exclusion. However, I strongly suggest you consult with a legitimate tax expert to make sure you have not forgotten anything. It will eliminate that stress I detect in your words. I wish you well.

Dick Dennis