Selling second Home

[grams]

I live in Ohio. May be selling a home that I own that is occupied by my daughter and son-in-law. (also Ohio) Don't have a clue about how to do this on Tax Return. It is not a rental. They live there and take care of all upkeep, but I do not charge them rent. I pay the Real Estate taxes.
Also I take care of any major improvements. I realize this wouldn't come up until my 2002 return, but if they move, I thought I'd best check into this. I have used my onetime Capitol Gains on another home that I lived in and then sold. I am now living in a Mobile Home.
They have lived in the house for 7 yrs. Don't think of what ever else info. you would need.
Would appreciate any help or suggestions.

 

[David J. Miller]

Call a tax accountant.

 

[loku]

Sale of house

You must report any gain from the sale of the house as capital gain on your income tax return. In general terms, the gain is equal to the sale price of the property less its basis. The basis is the amount you paid for the property plus the cost of any major improvements you have made.

If it looks like this will endup with a large gain, you should consider living in the house for two years. Then if you sell it, $250,000 of the gain would be tax free ($500,000 if you are married and your wife lives there with you for 2 years).

Also if you have a large gain, it may pay for you to hire a CPA to be sure you get all the deductions you are entitled to.