macro <svardin[at]spamnothotmail.com> wrote:

- quote -

You shouldn't need to. If the home was included in the
decedent's gross estate, it will receive a stepup in basis
to the value at the date of death (or the alternate
valuation date), so that if it is later sold, only the
excess of the sales price over the new basis would be
taxable.

The 250/500K is a limit on the amount of gain otherwise
reportable for income tax purposes and has nothing to do
with the amount to be included in the gross estate for
estate tax purposes.

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- quote -

In order for the homeowner's exclusion to be used, the
benefactor would have had to have sold the home prior to
death. The basis of the home (to the beneficiaries) would
be the value of the home (generally) on the date of death of
the benefactor.

That basis + costs of selling + improvements (prior to sale)
are deductible from the selling price to determine
gain/loss. There often is a loss which MAY BE deductible on
your personal tax return. Consult a tax professional, in
that regard, prior to filing your return.

"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

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- quote -

Since the date-of-death value of the home is the value for
estate tax purposes, there is no need for the sale
exemption, and it doesn't carry over after death (you can't
take it with you).

What the effect would be in 2010, when there is no estate
tax, but one might lose the step-up in basis, I'm not sure.

--
Thomas E Healy, CPA, PC
1650 38th St., Ste 202W
Boulder, CO 80301
Please send email to: tom[at]tomhealycpa.com, since I block all email at my
newsgroup address.
phone (303) 443-1804
fax (720) 489-3772

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"macro" <svardin[at]spamnothotmail.com> wrote

- quote -

I think you are mixing up apples and oranges here. By being
over the taxable limit, do you mean as far as filing a Form
706? If so that is on the VALUE of the assets, and has
nothing to do with INCOME (or capital gain) taxes. The
$250K/$500K exemption has to do with income taxes NOT estate
taxes. And, no, it does not apply to the estate, but then
the asset is stepped up to FMV at time of death, so there is
little if any gain if the asset is sold.

Vida Freeman, EA

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macro <svardin[at]spamnothotmail.com> wrote:

- quote -

No, nor should it be necessary. The basis in the house is
FMV on the date of death (or alternative valuation date IF
properly elected).

Regards,
Bill

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"macro" <svardin[at]spamnothotmail.com> wrote:

- quote -

No. But since an estate receives a basis adjustment at
death anyway, I don't see why this is an issue.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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macro <svardin[at]spamnothotmail.com> wrote:

- quote -

What's the real question you are asking?

No, the estate does not get the exclusion, but if the estate
sells the property, it gets to use the step up basis. That
pretty much cancels any gain.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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macro <svardin[at]spamnothotmail.com> wrote:

- quote -

Basically, NO, but the issue is moot anyway. The property
value (cost basis) is "stepped up" to the FMV on date of
death, effectively eliminating capital gains on immediate
sale.

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Assuming an estate is over the taxable limit, is it possible
to capture the $250K/$500K tax free homeowner's capital gain
exemption?

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