What is the name of your state (only U.S. law)? Washington
House on 20 acres appraised at 300K is going to be sold. House is unoccupied. Property is owned by elderly father who wants to give the proceeds to children.
Father inherited property upon death of his mother 4 years ago. Property values have dropped in the interim. His cost basis is the value of the property upon inheritance, so probably greater than the current value, correct??
Children want to have the property deeded to them and then sell the property themselves so that the father doesn't need to deal with realtors, the sale particulars, etc. Father is fine with that.
I say they are going to be hit with capital gains tax for the full value of the property once they sell it and that the father should sell it and bank the proceeds - then issue children a yearly gift up to the amount permissible without taxation.
Please let me know if this would be sound advice for the family to follow or if you have other suggestions.