My parents bought it for much less than that.
She will turn 80 this year and wont be in that large house for too much longer.
Is there a way for her to avoid a huge capital gains bill when she eventually sells it?
Mothers Helper
Dear Helper,
Congrats to your mother on the appreciation of her property!
A homeowner can profit pretty significantly from a sale without incurring taxes.
In most cases, selling your primary residence for a profit isnt subject to any tax.
If thats the case, the sale can qualify for acapital gains exclusionon $250,000 in gains (i.e.
the difference between the purchase price + cost of improvements, and the sale price).
If your mother is filing jointly with a spouse, that exclusion applies to $500,000 in gains.
Capital gains are taxed in the year theyre received.
She could:
you might learn more about payment plans at irs.gov/payments.
It sounds appealing right?
Check it out here!
Dana Miranda is a Certified Educator in Personal Finance, author, speaker and personal finance journalist.
