Tax Law (Questions About Taxes)/Sale of Home, Cost Basis


I am single. My wife passed away in 2011. I plan to now sell my home.
As I understand the reporting, the cost basis of the home is the original cost, plus improvement PLUS 1/2 of the value of the home in 2011.
For example, if the house were valued at $300,000, the cost basis is increased by $150,000.  On which line of the worksheet is that entered.
Also are there any exclusions regarding the sale of a home for a widower.
Hope you can help. Thanks for volunteering.

you can exclude up to 250k of gain. so unless you paid next to nothing for it.. and add to the inherited value.. you are in the clear.

irc 121 is the exclusion section - note you have two years to get the full 500k (250 each) exclusion for your wife - from the date of her passing, if you sell the house you can exclude up to 500k... so for a 300k house no gain is possible.    see quoted law below...

if beyond the two year window, you still have the one 250k exclusion.. so you should be fine..

26 USC § 121 - Exclusion of gain from sale of principal residence

Current through Pub. L. 113-99. (See Public Laws for the current Congress.)

(a) Exclusion
Gross income shall not include gain from the sale or exchange of property if, during the 5-year period ending on the date of the sale or exchange, such property has been owned and used by the taxpayer as the taxpayer’s principal residence for periods aggregating 2 years or more.
(b) Limitations
(1) In general
The amount of gain excluded from gross income under subsection (a) with respect to any sale or exchange shall not exceed $250,000.
(2) Special rules for joint returns
In the case of a husband and wife who make a joint return for the taxable year of the sale or exchange of the property—
(A) $500,000 Limitation for certain joint returns
Paragraph (1) shall be applied by substituting “$500,000” for “$250,000” if—
(i) either spouse meets the ownership requirements of subsection (a) with respect to such property;
(ii) both spouses meet the use requirements of subsection (a) with respect to such property; and
(iii) neither spouse is ineligible for the benefits of subsection (a) with respect to such property by reason of paragraph (3).
(B) Other joint returns
If such spouses do not meet the requirements of subparagraph (A), the limitation under paragraph (1) shall be the sum of the limitations under paragraph (1) to which each spouse would be entitled if such spouses had not been married. For purposes of the preceding sentence, each spouse shall be treated as owning the property during the period that either spouse owned the property.
(3) Application to only 1 sale or exchange every 2 years
(A) In general
Subsection (a) shall not apply to any sale or exchange by the taxpayer if, during the 2-year period ending on the date of such sale or exchange, there was any other sale or exchange by the taxpayer to which subsection (a) applied.
(B) Pre-May 7, 1997, sales not taken into account
Subparagraph (A) shall be applied without regard to any sale or exchange before May 7, 1997.
(4)  1 Special rule for certain sales by surviving spouses

In the case of a sale or exchange of property by an unmarried individual whose spouse is deceased on the date of such sale, paragraph (1) shall be applied by substituting “$500,000” for “$250,000” if such sale occurs not later than 2 years after the date of death of such spouse and the requirements of paragraph (2)(A) were met immediately before such date of death.

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Tax and general business including hospitality related (hotel mgmt degree and experience in industry prior to obtaining ms tax and cpa).


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