The rate at which the profit is taxed depends on whether or not the property depreciated in value.
The new rule is much more friendly to taxpayers. Only sales of more than $500,000 for married couples and $250,000 for single people have to be reported. So you don't need to keep records unless you think you home may sell for more than that amount.
Previously, someone like a plumber, who may have run his office from home and had a secretary there, could not take this deduction because he provided goods and services outside the home. Of course, the IRS realized the inequity there and changed the rules.
There's no easy answer here. It's not like you can say (that) when the parent turns 72 they should automatically turn their finances over to their children.
When people sell funds from one family to another -- say, Fidelity to Janus -- they know they've triggered a taxable event. But when people sell one Fidelity fund and buy a different Fidelity fund, they don't realize that's taxable as well.
It used to be much more advantageous prior to the change (in 1993). There's been a lot more tightening.
There will some unpleasant surprises and a sense of loss among single parents who have adult children living with them when they file this year.
Always file your tax return on time, even if you don't have the money. The biggest penalty is late filing.
They do it one year and they think maybe no news is good news.
The IRS will hold back a part of a refund if the two names don't match.
