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).

Tax Glossary

Tenancy by the entireties

A joint tenancy in real property in the name of both husband and wife. On the death of one tenant, the survivor receives entire interest.

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