How do I report the transfer of a principal residence following a tax-payers death to her 2 children? I don't want to trigger a capital gain. Thanks

[TurbotaxRobert · Accepted solution]

When there is a disposition of a residence that was the principal residence of the taxpayer, the disposition must be reported in the tax year that the disposition takes place (in this case there is a deemed disposition due to a death).  However, provided that the disposition is entered as a disposition of a principal residence, although you will be required to provide information regarding this disposition, no capital gain will be realized because a capital gain on the disposition of a principal residence is NOT subject to tax.