How can my parents avoid taxes on the sale of their home?
May 9, 2005
Date: Tue, 05 Apr 2005
Dear Mike Gray,
My parents would like to sell their house to my spouse and me, but they don't want to pay taxes on the sale of the house. Is there a way to just add us to the title and avoid taxes altogether?
Date: Mon, 02 May 2005
First, do your parents need the cash? In most cases, the $500,000 exclusion for married persons who sell a principal residence will eliminate any tax.
If they don't need the cash, your parents could simply make a gift of the house to you and your spouse, but this should be reported on gift tax Forms 709, and will use part of their lifetime exemption amount.
There are attorneys that can advise you on this. Let me know if you need a referral.
We have more answers to frequently asked real estate tax questions! We also offer up-to-date information about new tax real estate tax developments in Michael Gray, CPA's Real Estate Tax Letter.
Find us on Facebook
Follow me on Twitter
Connect on LinkedIn
Connect on Google+