Chances are, your parents or in-laws are still living in a big, sprawling place that’s worth a ton more than they paid for it. If the mortgage is paid off — or close to it — they can’t squeeze much tax juice from the home other than property-tax deductions. And even those deductions are of limited value to elderly parents in a low tax bracket.

In fact, if your parents claim the standard deduction instead of itemizing, they get no income tax benefit at all from home ownership.

Strategy: Consider buying your parents’ home. Then, lease it back to them at the going rate. That way, they can tap into the built-up home equity without moving away.

And you’re able to reap the tax rewards of renting the house.

For starters, the sale can put some much-needed cash into your parents’ pockets. And little or no income tax will be due on the sale, thanks to the giant home-sale exclusion. The tax law allows an individual to exclude tax on th...(register to read more)

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lawyer February 13, 2013 at 9:10 am

The information in the lookback period is seriously out of date and currently erroneous.

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