Bill, what are your thoughts on this situation?
My parents bought a rental property in 1980s for 50K. they did a 1031 exchange and bought a new rental property 4 years ago for 250K (same price as what they sold original for). they are now gifting me the property (inheriting is not option). I understand that the capital gains tax burden goes over to me when I sell, but what happens if I turn a gift rental into my primary residence and live in for 2 years. Can i get the 250K exemption and not pay any tax on difference between 50K original and 300K sale (future estimate)? I also understand that a 1031 exchange requires you to hold property 5 years and rent for 2, but with a gift of it, does that rule go out the window?
thanks Darren
