<H3>Your Denver Home May Need to Be Sold For Tax Advantages</H3>
While far from a specialty in Denver Home sales, working with estates and spouses grieving the loss of a lifetime mate, or even the children or personal representatives can be a very different “not taught in real estate school” experience. Often it is a liquidation and “get us the best price you can for our mom’s house in Englewood” while other times it is more “let’s fix it up and get top dollar”. Knowing the difference and how to compare in different Denver communities is critical. And knowing Mom’s house is her retirement fund makes a difference too. And while there are still fix up deductions, if there is no money to do them then the choice is made. Yet most critical is to have all the decision makers together to make their decisions.
Special consideration is made by IRS for the sale of a jointly-owned principal residence after the death of a spouse. Surviving spouse may qualify to exclude up to $500,000 of gain instead of the $250,000 exclusion for single people if certain requirements are met.
- The sale needs to take place no more than two years after the date of death of the spouse.
- Surviving spouse must not have remarried as of the sale date.
- The home must have been used as a principal residence for two of the last five years prior to the death.
- The home must have been owned for two of the last five years prior to the death.
- Survivor can count any time when spouse owned the home as time they owned it and any time the home was the spouse’s residence as time when it was their residence.
- Neither spouse may have excluded gain from the sale of another principal residence during the last two years prior to the death.
If you have been widowed in the last two years and have substantial gain in your principal residence, it would be worth investigating the possibilities. Time is a critical factor in qualification. Contact your tax professional for advice about your specific situation. Contact me to find out what your home is worth in today’s market. See IRS Publication 523 – surviving spouse.