Posted on: 29th Oct, 2006 08:07 pm
My wife passed away just a few days back. If I sell my home right now, do I qualify for the tax exemption of $50,0000 for my principal residence or should will the exemption limit be up to $250,000. I have also heard of the stepped –up for tax purposes. How does this affect me
Hi Geneva,
I would personally advice you not to rush.
If you are panning to sell your home in 2006 in the same year your wife died and presuming that at least one of you held the title of the principal residence for at least 2 of the 5 years before its sale, Internal Revenue Code 121 allows you to claim up to $500,000 principal residence sale tax exemption. But this is possible if you have filed a joined tax return with your late wife in the year in which she died.
Thanks,
Allan
I would personally advice you not to rush.
If you are panning to sell your home in 2006 in the same year your wife died and presuming that at least one of you held the title of the principal residence for at least 2 of the 5 years before its sale, Internal Revenue Code 121 allows you to claim up to $500,000 principal residence sale tax exemption. But this is possible if you have filed a joined tax return with your late wife in the year in which she died.
Thanks,
Allan
Hi Geneva,
If you don't sell your property in 2006, you can get some benefit from the stepped-up basis rule applied in case of inherited property. Assuming that your wife held 50% of the property and you inherited her share of interest in it, your new basis will be equal to the market value for that half portion on the date of her passing away along with your original basis for the other half of the property.
Thanks.
If you don't sell your property in 2006, you can get some benefit from the stepped-up basis rule applied in case of inherited property. Assuming that your wife held 50% of the property and you inherited her share of interest in it, your new basis will be equal to the market value for that half portion on the date of her passing away along with your original basis for the other half of the property.
Thanks.
If you reside in a community property state, then you may get a new stepped-up basis for 100% of the market value on the date of your wife's death.
Geneva,
I just wanted to offer my condolence for the passing of your wife. I'm sorry to hear that.
I just wanted to offer my condolence for the passing of your wife. I'm sorry to hear that.
I AM ASKING ON BEHALF OR FRIEND. HER EX HUSBAND HAS WILLED HER HIS PROPERTY @ DEATH. DON'T HAVE A LIVING TRUST JUST A WILL. WHAT ARE HER OPTIONS TO AVOID PROBATE & WHAT POSSIBLE PROBLEMS SHD SHE BE AWARE OF. WHAT ARE TAX IMPLICATION? SHE IS NOT ON TITLE. HE IS ONLY ONE ON TITLE AS AN "UNMARRIED MAN" HE IS WILLING TO RE-MARRY TO AVOID PROBLEMS. WOULD QUIT CLAIM BE BEST OR LIVING TRUST? WD IT BE BETTER TO RE-MARRY?
HE HAS CANCER & MAY NOT LIVE MUCH LONGER.
THANK U.
SALLY
HE HAS CANCER & MAY NOT LIVE MUCH LONGER.
THANK U.
SALLY
Hello Sallygw,
Welcome to the forums.
I think a living trust is better and safe.
If her ex-husband transfers his property to a living trust and names your friend as the beneficiary to it, then the trustee will transfer the property to her at his death without involving in the complicated process of probate.
Welcome to the forums.
I think a living trust is better and safe.
If her ex-husband transfers his property to a living trust and names your friend as the beneficiary to it, then the trustee will transfer the property to her at his death without involving in the complicated process of probate.