Estate Law Questions? Ask an Estate Lawyer.
Good morning Myrna. My name is ***** ***** I look forward to helping you.
Can you provide me a bit more information? Is there a reason why your husband can't simply close the purchase of the property and the loan simultaneously? What did your parents pay for the home? If they made any improvements, what was the cost? Do they live in the home? Thanks!
Thanks for following up. Since this is your parents principal residence for at least 2 years of the preceding 5 years, then they would have no tax consequences from the sale of their property. That's because under Section 121 of the Internal Revenue Code, they can exclude up to $500,000 of gain from the sale of a principal residence. Since the property is only worth $240,000, any gain would be well within this exclusion. As a buyer, your husband would not have any tax consequences from the transaction.
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