My mom is selling her house for $50,000. She owes 33 thousand on it. She doesn’t plan to buy another one. This one has been her only residence for 30 years. What kind of tax liability will she have? Any sites/cites that I can go to?? thanks
A blessing upon you, Kamandi. Thank you for your help! (and the good news!)
Why, thank you very much, Harry.
But please, don’t take my word for such an important financial decision. Be sure to read Pub. 523, which is linked above.
Kamandi, doesn’t that,like most laws, depend on the city/state/country? So, no state taxes either?
Good point, handy. I had assumed the question was about United States federal income tax, since the OP’s location is Oklahoma.
Since Oklahoma’s state income tax is calculated based on a resident’s federal taxable income, if the sale of a residence is not federally taxable, it’s not subject to Oklahoma state income tax either.
I’m unaware of municipal tax on the sale of a primary residence.
NYState has a “transfer tax,” which means the seller has to pay the state for the privilege of selling real estate. For every transaction, the seller owes the state, IIRC, $4 per $1000 of the sale (i.e., a house sold for $100,000 will yield the state $400). Check with your Mom’s state, obviously.
How is it she lived in it for 30 years, yet still owes $33k on it? Was she renting it part of the time before purchasing it?