Sale of non primary home

[PupLove4]

I have a client who owns the home his mother lives in. He never lived there. She recently passed away and my client sold the home. He received a 1099-S form. Does he need to report capital gain on this sale given that it is not his primary residence, and he never lived there but has had ownership transferred to him since 2010. I do not see how he can receive an exclusion.

Thank you!

To clarify further, it was his mothers home. Taxpayer never lived there. Mother transferred ownership to son in 2010. Mother continued to live there. She passes away and the son sells the house in 2024. I think he has a gain as well but was having difficulty finding research to this specific situation.

[sjrcpa]

Sounds like he has a taxable gain.

[abctax55]

".....but has had ownership transferred to him since 2010"

A few more details on that would likely provide better answers.

She 'gave' it to him?

Life estate?

[BobKamman]

If you can fit it into Code Section 2036, he would get stepped-up basis.  From the Regulations:

D transferred D's personal residence to D's child (C), but retained the right to use the residence for a term of years. D dies during the term. At D's death, the fair market value of the personal residence is includible in D's gross estate under section 2036(a)(1) because D retained the right to use the residence for a period that did not in fact end before D's death.

[sjrcpa]

I was interpreting it as good son bought a house for his mother to live in.

@PupLove4  Do tell us the facts.

[BobKamman]

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@sjrcpa wrote:

I was interpreting it as good son bought a house for his mother to live in.

@PupLove4  Do tell us the facts.

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"but has had ownership transferred to him since 2010"

Good son bought it, then transferred it to this guy?

[sjrcpa]

Oops. Missed that part.