tax liabilities on purchase of home from parents

California

We are purchasing our home from my parents (own 50%) and my uncle & aunt (own 50%). There are no liens on the property. The property assesses for $350,000, but we have a "rent-to-own" agreement with my parents and uncle & aunt that all of our "rent" payments be applied directly towards the purchase price of $200,000. We have so far paid them $40,000 and still owe $160,000. We would now like to put the title in our name.

A mortgage broker told us we can refinance by putting our names on the title and removing my parents and uncle & aunt and when we get the loan proceeds, pay off our balance due to them and that they would not incur any tax liability.

Is this true?

[HomeGuru]

They will have capital gains or income but there are ways to deal with the issues. Post on the TAx Law board.

thank you very much for your answer, i have posted to the Tax Law forum since Friday, but have not received an answer. is there any other way that i can get someone to clarify on ways to handle the capital gains taxes? i would really appreciate it!

[HomeGuru]

Be patient. Many of our contributors are very very busy.