A friend has been caring for his mother for past 10 years. Mother is dying. Four years ago, Mother gifted house to my friend. House market value = $200,000. Only $10,000 mortgage against house. Friend needs to sell house and move into a smaller house = $140,000 or less. QUESTION: If friend sells 200K house, pays-off 10K mortgage, and 7% realtor fee --- please give an estimate of taxes to be paid on the house sale? (Approximate dollar amount due for taxes please). Thanks for help. --Jaes.
USA What are taxes on sale of house?
- Thread starter Jaes
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If he owned it and lived in it for 2 of 5 years before sale, he can exclude taxable gain under section 121 of the Internal Revenue Code. Single can exclude $250k, married $500k.
So maybe no tax on sale.
If it was used as a rental or for business purposes, some gain, assuming there is any, has to be allocated to the time percent of business/rental use.
So maybe no tax on sale.
If it was used as a rental or for business purposes, some gain, assuming there is any, has to be allocated to the time percent of business/rental use.