Legal Question in Real Estate Law in Massachusetts
Capital Gains Tax question
I have a 2 family house that 7 years ago was transferred to my wife and I from my Mother. At the time we paid her $10,000. The house was valued at appr. $170,000 at the time. We have lived there since with my Mother in the other apartment. If we sell, current value around $560,000, what sort of Capital gain taxes could we expect? We have put about $60000 into this house since the transfer. I have heard if you live at the property for over 2 years this tax will not apply. We are planning to buy a Condo for my Mother and a house for us.
Thanks for your help and this great resource.
1 Answer from Attorneys
Re: Capital Gains Tax question
Hi -
Yes, if it's a primary residence and the sales price is $500,000 or less ($250K for each spouse when the seller is a married couple), however, it being a two-family, the fact that you've received rental income from the other unit (if you have) might result in this particular exemption not being available to you.
You might consider what's called a 1031 exchange, or a different tax strategy - my name is Len Foy and I am a real estate lawyer with Gould & Gould, our law firm has offices in NH and Mass - our number is (603) 434-3437, I hope to hear from you -
Regards and Good Luck -
Len Foy