Expert: Dick Dennis - 3/7/2007

Question
My situation is complicated.  My father left my mother, sister, and I a house when he died 10 years ago.  It was paid in full, so it was a good investment for the three of us.  All three of our names are on the title - but a year ago my mother and sister signed the house over to me.  I am selling the house now, and I just found out about the Capital Gains Tax.  My question is will it effect me?  Since I have been the only name on the deed for a year now and am selling it before the two years, will I have to pay this tax??

Answer
If the house is your primary residence, Michael, then if you live in it for two of the past five years, you are entitled to pass up paying any capital gains tax for up to $250,000 (assuming you are not married).

Ten years ago you had a lower tax basis when you received title from your father. Therefore, if you sell now you will be liable for a capital gains tax for the diffence between then and now.

To make sure you are doing this right, you should consult with a tax expert (CPA, tax attorney, etc.)

I do wish you well.

Dick Dennis