We sold our primary home to my daughter and husband on 12/3/2020 for 475K in Phoenix, AZ. Held the loan for the entire amount, with monthly payments at 1319.44. Recorded sale on my 2020 tax returns and paid required taxes. The children have decided to move back to NY, so we are going through legal process to put title back in our name and do a deed release. How would we calculate the new cost basis of the home when we go to sell it again? Will it be the 475K minus the payments they have made against the loan? Also will we have to own for another 2 years to get capital gains exclusion? Thank you.
