Ms. Lank: It seems I will soon come into ownership (via my mother's passing) of a property that is divided in two portions: a home and 10 acres that are more suited for commercial development. How would tax reporting and capital gains be handled if the property is divided as such and then only one of the two portions is sold? How does one value the portion sold for the $250K in capital gains exclusion?

For instance, if I were to sell the commercial portion for $350,000 and had put a stated value of $100,000 at time of my mother's death, does that mean that any future sale of the home portion would be subject to capital gains tax? Or how would all of this be handled or divided? By acreage only? — K. A., askedith.com

Answer: I am not an accountant, and I am not a lawyer. I do know your cost basis for either portion is its value at the time of your mother's death. If you sell for more than that, the difference would be subject to capital gains tax.

You didn't say whether the property currently has two separate property tax accounts. When you settle the estate, ask your lawyer whether you can have an appraiser evaluate two separate portions, with a reasonable acreage attributed to the home.

That $250,000/$500,000 homesellers' tax exclusion applies only to a place you've owned and occupied as your main residence for at least two of the five years before the sale.

Believes in Staging

Edith: My wife and I were dead set against professional staging and making any improvements to our lovely home, for the same reasons noted by a previous reader who ranted about staging. I was particularly adamant, saying, "Our house is ready to sell as is" to anyone who might listen.

Well, the Realtor showed up with a professional stager in tow, who proceeded to provide a laundry list of items to get rid of. I almost threw them both out of the house. My wife took a calmer approach. We ponied up an extra $250 to have the stager do the heavy lifting.

When it was done it was no longer our house. But guess what. We sold it in four days at the listing price, and we completely changed our minds about staging.

That "empty-feeling, barnlike home" your reader complained of is what potential buyers are looking for. They don't care about your beautiful grandkids' pictures or your selfies at national parks. They are looking for a place that allows them to envision what they would do with the property. Less is more here.

Potential buyers can see themselves in your house when clutter and personal items are removed. We believe professional staging went a long way toward getting our house sold within a week. We endured the grief of staging by unloading a bunch of furniture and home decor items that definitely would have delayed the sale process had they been on display. — B. T.

Answer: Thanks for sharing your experience. I agree, but I still feel a reasonable asking price also has a lot to do with a prompt offer.

Attorney's Opinion

Dear Ms. Lank: I feel strongly about your advice on reverse mortgages. Although you have provided relatively accurate advice, I want to contact you directly with my concerns. I am an attorney who concentrates on bankruptcy.

Reverse mortgages can be wonderful tools. They may assist homeowners to keep their shelter ... when they would have problems otherwise. Or it may ... give owners some additional income when they have no interest in leaving an estate.

But in other cases a reverse mortgage masks long-term problems. They allow the owners to maintain an unrealistic lifestyle.

The alternative is that the homeowners downsize. ... Yes, it will cost money to move (including broker's fees), but there are costs for a reverse mortgage, too. ... And there is nothing wrong with renting. Often these alternatives are in the same town or area, so longtime relationships are not severed.

There are times when a reverse mortgage makes sense. A single person who has a simple home with a small property to maintain and is not interested in leaving an estate may realize some money (or limit expenses) so that he or she can travel or have other funds as a reward for being thrifty for many years. But reverse mortgages ... must be carefully scrutinized. — L. R.

Answer: I appreciate your view of the subject. And after all, I did end that recent discussion of these loans by saying, "Like many financial strategies, this one is just right for some people, totally wrong for others."

Contact Edith Lank at www.askedith.com, or at 240 Hemingway Drive, Rochester NY 14620.