Submitted By: John
Answered: June 18, 2013 8:30 am

My sister and I inherited my mother’s house when she died a month ago. If we sell it soon, do we get the home sale exclusion?

Because you receive a stepped-up basis for the home (equal to its value on the date of your mother’s death), you may have no gain from the sale if it occurs soon. If you sell it for less than this basis, you have a capital loss that can be reported (assuming neither of you uses the home as your personal residence). If you have a gain, it is taxable (no home sale exclusion applies because you did not own and use the home as your principal residence for the requisite time period).

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Tax Glossary

Accountable reimbursement plan

An employer reimbursement or allowance arrangement that requires you to adequately substantiate business expenses to your employer, and to return any excess reimbursement.

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