CA Real Estate
California Real Estate Law Questions? Get Answers Online Now.
Hi and welcome to JA. Ray here to help you today.
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You r father can claim the exception to capital gains here.If your parents sell their home, you may exclude up to $250,000 of your capital gain from tax. For married couples filing jointly, the exclusion is $500,000. Also, unmarried people who jointly own a home and separately meet the tests described below can each exclude up to $250,000.
The law applies to sales after May 6, 1997. To claim the whole exclusion, you must have owned and lived in your home as your principal residence an aggregate of at least two of the five years before the sale (this is called the ownership and use test). You can claim the exclusion once every two years.The title company may want the wife here to sign a quitclaim or other document to confirm her consent to the sale even though she is not on the deed.I would contact title company here ahead of time to see if she needs to sign as well.
It looks like they would still be able to claim this exception. I would ask the title company about the unpermitted structure to see if the description is sufficient.It may well be but I would be upfront about that with them..They can ensure there is enough description in the closing documents.
I appreciate the chance to help you today.Thanks again and good luck here with closing.