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Inheritance tax on mother's home sale in Missouri

Sent to Tax Experts June 02 11:25 PM

My mother passed away last year and my sister and I are in the process of selling her home. It was left to both of us in my mom's will. When we sell the home and split it 50/50 do we have to claim it on income tax next year? We live in Missouri and my mom's home is also in Missouri

Customer (name blocked for privacy)
Status:  Closed   Value: $5
Answer
June 2 11:32 PM (7 minutes and 19 seconds later)
         
REPLIEDCheck Mark

Through the inheritance, you received a "stepped up basis" in the house. This means that your cost, for determining gain or loss, is whatever the value of the house was at the time of your mother's death. When you sell the house, each of you should report your half of the sales proceeds and your half of the basis described above. The difference will be a long term capital gain or loss. If there is a loss, you may or may not be able to deduct it depending on your individual circumstances.

jon@jonacpa.com



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Reply
June 2 11:38 PM (6 minutes and 10 seconds later)
         
Reply to Jon Andrews's Post: I thought the capital gain/loss was done away with.?
Customer (name blocked for privacy)
Reply
June 2 11:45 PM (6 minutes and 57 seconds later)
         
I thought the capital gains/loss was done away with.
Customer (name blocked for privacy)
Answer
June 2 11:50 PM (4 minutes and 53 seconds later)
         
ACCEPTEDCheck Mark

Capital gain of up to $250,000 (or $500,000 if married filing jointly) is exempt from tax IF the property has been owned and lived in by the seller as their principal residence for two of the five years immediately preceding the sale. Since this was your mother's residence, not yours, it does not qualify for the exemption.

However, unless the house has appreciated substantially since the time of her death, the tax should be minimal.

jon@jonacpa.com



Helping individuals and businesses nationwide reduce taxes and increase profits through sound planning and quality service

Jon Andrews -- Certified Public Accountant (CPA) -- 100% Positive Feedback on 2630 Tax Accepts
I deal with all levels of tax planning and controversy - from the ordinary to the complex.
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