Reply With QuoteMostly all good advice, but bottomline, he needs to talk to a good tax guy quick.
And even then the exclusion is only $250K, the rest would be taxable..
Exactly. He needs to buy it for anywhere between $1-$10k. Then the person that is giving him the house can give the money back.
Is this person giving him a $500k+ house?
Also considering the market conditions, it would be in his best interest to keep it a few years also.
Mostly all good advice, but bottomline, he needs to talk to a good tax guy quick.
He needs to hold onto it for 2 years also after a sale has been closed.
I believe (I'm not a CPA) in order to be able to get $250k ($500k if married) tax free I believe he would need to live in it for 2 years as a primary residence. I'm pretty sure he would have tax ramifications either way if he doesn't live in it atleast 2 years.
I would highly recommend to seek the advice of a qualified CPA to find the best way to approach this situation.
I believe (I'm not a CPA) in order to be able to get $250k ($500k if married) tax free I believe he would need to live in it for 2 years as a primary residence. I'm pretty sure he would have tax ramifications either way if he doesn't live in it atleast 2 years.
I would highly recommend to seek the advice of a qualified CPA to find the best way to approach this situation.
Or give it to me and I will get him paid.
CPA Tax Advice
The Only Way To Avoid Any Taxes Is To Receive It As An Inheritance. (unless We Are Talking A Multi Million Dollar Home)
His Tax Basis In The House Will Be The Fair Market Value Of The House At The Date Of Death. If He Intends To Sell It Immediately Then Unless He Puts Fixes Into It The Selling Price Should Be The Same As His Tax Basis And Result In Zero Gain.
Two words, "Living Will"
Get professional advice. Their can be problems any way you go. The thing not mentioned by all saying to just wait and take it as an inheritance is that if the dying doesn't have a living trust or some sort of other vehicle to protect his assets then after paying probate taxes it might have just been better to take the property now.
Two words, "Living Will"See what I mean about the expert advice. A living will is basically whether or not you want the plug pulled on you should you be on life support and that kinda thing. Living trust would protect the property from probate taxes.
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