USA Buying home from parents below value

[DBSarasota]

Hello, I would really appreciate and help or input with this situation.

I live in a home owned by my parent's revocable trust. I now want to buy it, and the sale price will be around $150K below value. They are in Delaware and I am in Florida. In Delaware, for Medicaid purposes, they can sell the property for 2/3rds value without it being considered a gift. I will likely need a gift letter for the lender however. The letter would be for around $70K.

My questions are: if I sell the property in two years, will I have to pay capital gains?; is there a better way to transfer the property or equity?

Thanks so much!

 

[BIG E]

You need an attorney to advise you on a special circumstance like this.
When the home was first put into a trust, was there a FMV made, or a cost basis
determined on record somewhere?
Once the valuation to you is determined, and you use the home for 2 years, then you can get
the Section 121 exclusion for its sale.

 

[DBSarasota]

Thank you for this. It was put in trust as a new home 4 years ago. However, I am the only person that is lived in the home. My parents never occupied. Basically, they lent me the money since I didn’t have it, but it was titled in their trust. Now I have the money and can buy it for that original price. So FMV at that time was the new home price.