Home sale between family has benefits
DEAR BOB: I am buying my first home in the next couple of months from my aunt and mother. They’re inheriting my grandmother’s home, but neither of them wants to keep it. What is the best way to go about this family purchase? –James M.
DEAR JAMES: Your aunt and mother first need to obtain marketable title from your grandmother’s estate. This is very important. The reason is their adjusted cost basis is the home’s market value on the date of grandmother’s death.
If they sell the house to you shortly thereafter, for the same market value, they will owe zero capital gains tax.