Buck Compton said:
Red Pear Realty said:
As I understand it, your basis resets upon inheritance to market value on that date of inheritance. Then you lived there for at least 2 of the last 5 years, so you can exclude $250k of capital gains if single or $500k if married. Double check with your CPA.
You're right on this. Tax basis steps up and exemption applies. But just so everyone is aware, that's a cumulative lifetime exemption, not every time you sell a home.
Thanks all. I knew about the step-up (and we are definitely going to consult our CPA during this process). Based on that stepped-up value we are still expecting to sell for $150-200k over the value from 2019. We are definitely hoping to avoid the hit from that, but details online are limited and mostly focus on the same person buying and selling the home.
Buck, the info online I've seen seems to indicate the 250/500k exemption limit can apply more than once but not more than every 2 years. I haven't seen anything mentioning that it's a cumulative lifetime limit, but, based on my experience with tax policies the last few years, I wouldn't be surprised if it wasn't explained well. Our income taxes have grown more complicated over the last few years due to a few different factors, including inheriting assets from a family member that passed, and the information online is often terrible. We have a CPA, but I still like to know what our obligations are on my own.
