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by CareyBot

DEAR BOB: As a result of my divorce settlement, I am the sole owner of the house where I lived since 1977. The purchase price was $113,000. Today, I can sell it for $900,000. I am aware I can get that $250,000 principal residence sale tax exemption you often discuss, but I need to know how the taxes are calculated. Did my basis change when the house was deeded to me as the sole owner in 2003? --Tatiana S. DEAR TATIANA: Before selling your home, please consult your personal tax adviser to go over the exact home sale price details. Because interspousal real estate title transfers are usually tax-free, from your description it appears you will owe tax on the entire capital gain, minus your $250,000 principal residence sale tax exemption of Internal Revenue Code 121. Purchase Bob Bruss reports...