johnnysoaps
Junior Member
What is the name of your state? California
My inlaws own two homes which are both mortgage free. One they currently live in and the other is a home my wife and I are currently renting which they want to sell to us. The purchased the home they are selling to us in 1968 for $50,000 and we will be purchasing the home at a fair market value of $550,000. Using the tax free gift of $44,000 per year for my wife and I, we technically pay off in the home tax free in 12.5 years using $44,000 promissiory notes.
My inlaws have not lived the home within the last 5 years BUT want to take advantage of the $500,000 of exemption of the current residence status (2 of 5 years). They are both retired and live with my mentally retarded sister in law.
We are considering switching residences(moving) for two years to get the exemption but they do not want to move because they are too they set in their ways and my mentally retarded sister in law is even more of a challenge to change her current schedule and routine. This could possible have a big negative effect on her mental state.
Are there other options for the primary residence clause? Does retirement or my sister-in-laws mental retarded condition fall within the safe harbor in capital gains law? Any suggestion?
Thanks in Advance!
My inlaws own two homes which are both mortgage free. One they currently live in and the other is a home my wife and I are currently renting which they want to sell to us. The purchased the home they are selling to us in 1968 for $50,000 and we will be purchasing the home at a fair market value of $550,000. Using the tax free gift of $44,000 per year for my wife and I, we technically pay off in the home tax free in 12.5 years using $44,000 promissiory notes.
My inlaws have not lived the home within the last 5 years BUT want to take advantage of the $500,000 of exemption of the current residence status (2 of 5 years). They are both retired and live with my mentally retarded sister in law.
We are considering switching residences(moving) for two years to get the exemption but they do not want to move because they are too they set in their ways and my mentally retarded sister in law is even more of a challenge to change her current schedule and routine. This could possible have a big negative effect on her mental state.
Are there other options for the primary residence clause? Does retirement or my sister-in-laws mental retarded condition fall within the safe harbor in capital gains law? Any suggestion?
Thanks in Advance!