Yes, as long as you have moved into the inherited residence and live in it as your primary place of residence. If you are over age 55, you may sell your primary residence, buy another residence, and transfer the base year value as long as all the other requirements (timing, value, residency, timely filed claim) are met.
Do you have to pay capital gains on sale of primary residence?
Sale of Primary Residence. These rules state that you must have occupied the residence for at least two of the last five years. If you buy a home and a dramatic rise in value causes you to sell it a year later, you would be required to pay capital gains tax on the gain. This rule does, however, allow you to convert a rental property…
Can a 55 year old sell a home and be tax exempt?
A past deduction for homeowners age 55 and over even allowed them to exempt up to $125,000 of gains from the sale of their homes. But the Taxpayer Relief Act of 1997 replaced the age exemption with a an exemption for all home sellers. The change let home sellers exclude gains up to $250,000 per individual or $500,000 per married couple.
When do you qualify for the principal residence exclusion?
To qualify for the exclusion, you must have used the home you sell as your principal residence for at least two of the five years prior to the sale. Your principal residence is the place where you (and your spouse if you’re filing jointly and claiming the $500,000 exclusion for couples) live.
How to qualify for a tax exclusion on the sale of a primary residence?
To qualify for a tax exclusion on the sale of a primary residence you need to meet the ownership and a use requirement. First, you need to have owned the house for two of the last five years and you must also have used the house as your primary residence for two of the last five years.
What happens to your primary residence if you remarry?
If your spouse dies, and you have not remarried as of the date you sell the home, you will be considered to have used the home as a principal residence for the same period that your deceased spouse used the home as their primary residence. So if you need to us this rule to maximize your exclusion, be sure to sell the home before you remarry!
Can a 55 year old transfer the base year value?
If you are over age 55, you may sell your primary residence, buy another residence, and transfer the base year value as long as all the other requirements (timing, value, residency, timely filed claim) are met. It does not matter how you acquired your original property. 8.
