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My 94 year old widowed mother wants to sell her house. Her only income aside from Social Security is a $150/month retirement check from a job she had years ago.
How much, if any, capital gains tax will she have to pay? The house cost less than $70K when built in 1953, and she is being offered $615,000.
What it means is that almost all of the taxable income will be capital gains, i.e.: 20% tax rate (+medicare on the gains above $200K). It will also probably drag the Social Security payments into the taxable income (at least partially), but most of the tax would be for the house.
I suggest checking with a licensed tax adviser (EA or a CPA licensed in your state) for a more precise simulation, and also to explore potential exemptions, deductions and potentially capitalize-able expenses. Check into capitalized renovations and other capital expenses on the house, primary residence exclusion, potentially stepped up basis since her husband passed away as @mhoran_psprep mentioned, etc etc. A decent professional adviser will definitely help you identify all the points.
