Expert: Lori Frankfort - 2/25/2008

Question
Hi,
I'm interested in purchasing my parents home from them below FMV.  What are tax ramifications for me and them?

Also, if they sell to my finace, would that still be selling to an outside buyer?  How would that affect the sale since it would no longer be a relative-to-relative transaction?

Thanks,
Robin

Thanks,

Answer
Hi Robin,

You will need to contact an escrow company or tax accountant for specific answers, taxes are not my expertise.

To the best of my knowledge, if your parents sold to you then they would pay capital gains on the sale.  For you, the property will be re-assessed at the value that you purchase at, and your property taxes will be based on that new value.  It's exactly the same if they sold to your fiance.  There are no special tax rules for a sale from a relative to a relative, only a gift or inheritance.

Best,
Lori Frankfort