USA Transfer/Sale of a home from Parent to Child

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My wife and I live in a house that is owned by her parents and we would like to take ownership of the home now. They took money out of their primary home to pay for the home that we live in so once we have the house in our name we would pay their loan off. What is the best way to do this considering that we don't want anyone to be burden with a tax bill?

Home is in CA

Thanks.
 

kirby

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Sorry, there is no "just do this in every case" for this one. Depends on the tax basis of the house, if they've been treating it as a rental to you and taking depreciation, and what amount you are paying for the purchase, and so on. So it is great that you are planning for this. But now go to a tax pro who can ask you all the variables. Maybe the person who does your in-laws' taxes so they can be careful to protect your in-laws' tax situation in all this. Warning - make sure it is a pro and not just "the neighbor or friend who dabbles in taxes" and happens to do your in-laws' return.
 
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