I have a client with no taxable income (her taxable social security and pension combined are less than her standard deduction).  However, she sold a home for $1,400,000 that she purchased in 1973 with a cost basis of less than $100,000.  With her exclusion her capital gain on the sale is close to $1,000,000.

Does she have to pay capital gains tax on this transaction?

KMACK