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.
IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised
that any written tax advice contained on this website was
not written or intended to be used (and cannot be used) by any
taxpayer for the purpose of avoiding penalties that may be
imposed under the U.S. Internal Revenue Code.