Posted on: 04th Jan, 2010 10:10 pm
Hi , my grandmother sold some of her land to a person on monthly payments a couple of years ago, he sold the land and paid her a lump sum, 36k, she is 88, the land was attached to her
home and she has lived there since the 60's. will she pay capital gains tax? lives in tx thanks
home and she has lived there since the 60's. will she pay capital gains tax? lives in tx thanks
Capital gains tax can be exempted after the sale of a property which has been owned by an individual and used as his/her sole or principal place of residence. However, you need to contact an attorney to know whether or not the land adjacent to the property would be a part of this exemption.
Hi shmootoes,
If your grandmother has earned a profit by selling the home, she will be entitled to pay capital gains taxes on the amount of profit. She can exclude $250k in capital gains taxes if she had occupied the home as a principal residence for 2 out of the last 5 years. The 2 years during which she occupies the property do not necessarily have to be continuous. It can be any 2 years out of the previous 5 years. You can contact a tax advisor or an account or the IRS to check if your grandmother qualifies for the capital gains tax exemption.
Thanks,
Jerry
If your grandmother has earned a profit by selling the home, she will be entitled to pay capital gains taxes on the amount of profit. She can exclude $250k in capital gains taxes if she had occupied the home as a principal residence for 2 out of the last 5 years. The 2 years during which she occupies the property do not necessarily have to be continuous. It can be any 2 years out of the previous 5 years. You can contact a tax advisor or an account or the IRS to check if your grandmother qualifies for the capital gains tax exemption.
Thanks,
Jerry