| Cindy Brandt - Hello Jenn,
Unfortunately, the exclusion for principal residence only applies to where you live. However, because you inherited your mother's home, you are eligible for what is called a "stepped up basis". What this means is that you and your brother only have to pay tax on the difference between what your share of the house was worth on the date that your mom passed away and what it was eventually sold for. Say, for instance that it was worth $150,000 on the date that she died, each of you would have a cost basis in the house of $50,000. If it was then sold for $180,000 you would each pay taxes on $10,000. |