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Can My Father Sell His Home Without Paying Taxes? – Eva

“Dear Jim,

I am in charge of my dad’s property.

My father 82 urs old, lives in Mexico and owns a 2 flat that he rents out here in the US , he has asked me to sell it. In order to take advantage of the 1 time tax free sale of a property for people over 65 does the property have to be owner occupied?

Eva”

Eva:

Thanks for your question.

Here are the rules for tax-free sale exclusion of a principal residence:

To claim the exclusion, you must meet the ownership and use tests. This means that during the 5-year period ending on the date of the sale, you must have:

Owned the home for at least 2 years (the ownership test), and

Lived in the home as your main home for at least 2 years (the use test).

Rental property is not excludable unless it meets these tests.

Thanks

Jim

Jim Buttonow is one of the resident debt experts here at GetOutOfDebt.org that helps people for free. Jim is a licensed CPA who spent 19 years with the IRS coordinating large compliance teams of IRS agents and specialized personnel. In the last 5 years, Jim has invented consumer and practitioner software and treatises on how to address many different tax issues. He has also represented many people before the IRS examination, collection, filing, and appeals functions. He currently assists taxpayers on an active pro bono tax practice aimed at serving people in need. He can be reached at IRSMind.com.

If you have a tax question you’d like to ask just use the online form. I’m happy to help you totally for free.




About the author

Jim Buttonnow

Jim Buttonow, CPA/CITP, practices in the area of IRS and State tax controversy. He has more than 29 years of experience in IRS practice and procedure. Reach Jim at [email protected] or through his website www.buttonowcpa.com

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