How can my parents avoid paying taxes when they sell their house?
November 9, 2006
Date: Tue, 17 Oct 2006
I am in the process of buying my parents' house. They have a tax basis of $5,000 and the house is currently valued at $500,000. What is the best way to buy the home and avoid a tax burden for my parents?
Date: Thu, 02 Nov 2006
Assuming this is your parents' principal residence and has been their principal residence for two of the last five years, your parents should qualify for a $500,000 exclusion. See our report, "Could your residence be the ultimate tax shelter?" I suggest that you get help from an attorney or title company with the paperwork.
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.
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