[jkenhan]

My mom passed away in 1995. However, we did not put the house for sale until this year. After going through probate, we finally sold the house. B/c there was little owed on the property, the gain was about 80K split between my father and I. My parents were divorced but they kept their interest in the house at 50/50. When she died, she left her 50% to me.

How do I figure out how much tax I will need to pay? Also, I spent almost 10K fixing the house to sell it.

[ScottGem]

First you need to get the property appraised as of the date of death. That becomes your cost basis. You then add any IMPROVEMENTS you made to the property. Repairs are not counted. That is then subtracted from the sale price to determine the amount subject to taxation.

[AtlantaTaxExpert]

What Scott says is true FOR YOU!

If your Dad was living in the house since your mother's death, the first $250,000 of HIS share of the profits is exempt from any capital gains tax, so he will have no tax to pay, nor is even required to report the sale on his tax return.

[ebaines]

Since you were a 50% owner, half of the proceeds from the sale are yours, and for cost basis use one half of the fair market value of the house as of your mother's date of death in 1995. You report the sale and resulting capital gain on Schedule D.

[jkenhan]

Thanks All. This was very helpful

[wnhough]

To qualify for $250,000 home-sale capital gaintax exemption
, your dad must have owned and occupied the principal residence an “aggregate” two of the five years before the home sale. Occupancy need not be continuous. Nor must the residence be the seller’s principal residence at the time of sale. For example, if the seller owned and occupied the home for two years, and then rented it to tenants up to three years, the sale qualifies.

[wnhough]

QUOTE," . . . Also, I spent almost 10K fixing the house to sell it."--- In general, you cannot deduct home repairs or home
Improvements on your tax return in the current tax year.However, in the case of an increase to your home adjusted basis due to an improvement, you, in lieu of writing it off in the year incurred( paid), you capitalize the costs for the useful life of the improvement,i.e. useful life of the replacement of whole roof, or a central air conditioning, etc.
When you sell the home, then you can write off all of the costs spent for the improvement instead of capitalizing it over the years.
And you need to keep your records on the costs for home improvement so that youcan avoid possibly tax related problems when selling your home and report it to the IRS.
A lot depends upon your other sources of income, state or federal law as well as where you live.
Please refer to the IRS Publication 530~~