Chapter 13 Your Home — Selling It, and Passing It On

The question If we sell our home, how much of the gain is taxed? And if the house passes to our children, what happens to its tax cost?

The answer Two pictures answer this. The §121 exclusion lets a homeowner exclude up to $250,000 of gain on a home sale ($500,000 for a married couple filing jointly) if the ownership and use tests are met; the screen shows how much of your gain it covers. The basis picture shows that property received at death generally takes a basis equal to its value at the date of death, so gain built up before then is not carried to the heir — while property received as a gift generally keeps the giver's basis.

13.0 In one line Selling: how much gain the exclusion covers. Passing on: the basis resets at death, but not for a gift.

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