Legal Question in Real Estate Law in Virginia
Home Sale Exemption
Hello,
My father passed away January 2008. He and my mother own a principal residence, which my mother may want to sell at some point in the near future. Is my mother still entitled to the $500,000 home sale exemption on their principal residence?
Thank you,
Ron
1 Answer from Attorneys
Re: Home Sale Exemption
No, the joint capital gains exemption of $500K ended upon your father's death; your mother as his surviving spouse is now entited to only a $250K
exemption. But she's also entitled to a so-called stepped up basis on the home for the purposes of calculating whatever capital gains tax she may owe resulting from the sale of the property, and such basis would be the market value of the home at the time of your father's death(as opposed to its orignal purchase price). Consequently, this stepped up basis could possibly result in your mother having no capital gains tax liability at all from the sale of her property.
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