Originally Posted by Ginger
Helen, congrats on being mortgage free.* We paid our mortgage off last August.* *My husband retiring in October.* *I have a question for Martha if she sees this.* Our home is worth more than $500,000 -- so if either of us dies does the exclusion we have to pay taxes on* if we decide to sell the house revert b to $250,000??
The exclusion applies to the PROFIT that you make from the sale of your home.* You take the sales price and subtract the BASIS (purchase price plus improvements) from it.* So even though your house is worth more than $500K, as long as your profit is $250K or less, all of it would be excludable even if one of you dies.