Legal Question in Real Estate Law in Pennsylvania

Re: Capital Gains Tax

Well as far as federal taxes are concerned probably not.

Assuming that the seller has lived in the house 2 of the last 5 years and the seller is single then the first $250,000 of profit is tax free. So if in the original price of the house and land was at least $5000. Or if it was less than $5000 over the years she has made improvements that when added to whatever was paid for the house equal $5000 then there is no capital gain as her profit will be less than $250,000.

If you have a question feel free to contact me.

{John}

Re: Capital Gains Tax

I agree with John, although if the Seller is married and files a joint return, the exempt amount can go as high as $500,000. The Seller must report the sale, even if it is not subject to any tax, and the Buyer must file a Form 1099 with IRS reporting the sale. Your attorney is probably familiar with this reporting requirement.