Legal Question in Tax Law in California
Federal and State Tax Laws Regarding Senior Citizens
A a recently widowed, 76 year old lady hasn't paid Federal or State (CA) income tax in many years due to only income of both widow and now-deceased husband was from Social Security. This lady has since sold a home and received a capital gain of approximately $250,000 most of which she used to purchase another home ($150,000.00). Her only current income is still her Social Security and a small monthly dividend from Certificates of Deposit(CD's)which she has been in for only 2 months. Does this person have to file for either Federal or State (CA) taxes?
2 Answers from Attorneys
Re: Federal and State Tax Laws Regarding Senior Citizens
Thank you for your legal question and posting.
The short answer is yes. The person you've mentioned has capital gain income, and thus must file. Calital gains are unearned income, and federal law requires the filing of a return any time you have unearned income in excess of $700.00.
Schedule D, Capital Gains, should list the sale of the house, and you are entitled to an exemption for rolling over at least a portion of the proceeds into another primary residence, making the portion going into the home exempt from income tax.
I hope this information helps you, but if you need any other questions answered, want more information, or feel that you need an attorney to assist or handle any part of this for you, please feel free to email me directly at [email protected]. I�m happy to help in any way that I can, and best of luck.
Re: Federal and State Tax Laws Regarding Senior Citizens
Yes, she should file taxes. However, assuming that the house was her primary residence, she should have a $250,000 exemption if she used it as such for at least 2 of the last 5 years
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