Q. My father transferred the title to his home to me last year. I was living in the house at the time and continue to do so. I have no plans to sell the house for several more years. However, at the time of the deed transfer, the attorney told us that I would have to pay capital gains tax when I sold. I've been reading that as long as one lives in a home for two years, the tax is waived as long as the gain is not more than $250,000. But do different rules apply to a deed transfer?

A. No, the rules are not different, says Clint Costa, an attorney and CPA at the Chicago law firm of Shaheen, Novoselsky, Staat, Filipowski & Eccleston.

If you live in the home for two consecutive years before the sale, or two of the five years you own it before the sale, you will probably qualify for the capital gains deduction of up to $250,000 -- or $500,000 if you're married.

Let's say, for example, that your father bought the home more than 30 years ago and paid $30,000 for it. That would be considered its initial value.

If you sell the house for $350,000, you would subtract that $30,000 to determine the capital gain, which would be $320,000. Now, subtract the $250,000 deduction, and you'd only have to pay tax on the remaining $70,000.

But it's always smart to let a CPA or a tax attorney review your specific situation on a major issue such as this to make sure you don't run afoul of the IRS.