Q: My mom deeded her house to me. It is my primary residence. What is the best way for me to sell it and pay less taxes
Mom is still living in the home currently.
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A:
When selling a home received through a deed from your mother while she still lives there, timing can significantly impact your tax situation. The IRS has specific rules about basis adjustment and capital gains exclusions that could work in your favor.
If you've lived in the home as your primary residence for at least 2 of the last 5 years before selling, you may qualify for the capital gains exclusion of up to $250,000 for single filers or $500,000 for married couples filing jointly. The basis of the property - which affects your capital gains calculation - will depend on whether your mother gifted the house to you during her lifetime or transferred it through inheritance.
Given the complexity of your situation, you should work with both a tax professional and real estate attorney to structure the sale in the most tax-advantaged way possible. They can help you understand whether to sell now or wait, how to document your residence status, and potentially explore options like a qualified personal residence trust (QPRT) if appropriate for your circumstances.
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