From:  Wonda
Date:  Wed, 03 Jan 2007

My mother was widowed two years ago. She has lived in her residence for 30 years. If she sells her home for $300,000 in Alabama, will she have to pay any tax for the capital gain?

Answer

Date:  Wed, 31 Jan 2007

Hello Wonda,

Since your mother has lived in the house for more than 30 years, she qualifies for a $250,000 exclusion for the sale of a principal residence.

If her husband owned a portion of the residence, she may be entitled to a basis adjustment for the inherited part of the residence, which could eliminate any additional gain.

I suggest that she consult with a local CPA who is familiar with these rules when preparing her income tax return for the year of sale.

Good luck!

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