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Old 12-06-2017, 04:45 PM
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Money after foreclosure sale

My parents old house sold at a county foreclosure sale for back taxes. After the Sale there was $145,000 left over that the county is giving back to my folks. They haven?t live in that house for close to 10 years. I am trying to determine if the will owe taxes on the money and if so, how much?



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Old 12-07-2017, 12:25 AM
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I do not think so; if the home foreclosed and sold by the bank was their PRIAMRY residence in which they have lived at least 2 years in the last 5 years before the sale, then they are eligible for the capital gain exclusion of $500K.
It appears from their numbers that your capital gain is much lower than $500K. In this case the money they receive from the bank is not taxable and they do not have to report it on their tax return.



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