My in-laws just went into assisted living. Their home is valued at $700K. They can sell now while both are alive and get the $500K exclusion. Or they can pass the home on to my wife and sister-in-law with no tax liability (inheritance). But what happens if they (my wife and sister-in-law) turn around and sell the home immediately? Do they owe taxes on the full $700K sale price? What is the best strategy? Sell now or pass on to heirs?
