My 80-year-old retired father-in-law lives in California and was renting his house built in 1948 in Albuquerque. He is also receiving Social Security income. He just sold his rental and would like to use the proceeds for retirement. He currently owns his California home free and clear. My in-laws have a revocable trust where my wife is the sole attorney-in-fact. What is the best way to deposit the sale proceeds that would lower the tax burden as much as possible?
What is the best way to deposit the sale proceeds that would lower the tax burden as much as possible?
Can you rephrase your question?
There is no way that merely depositing the proceeds, in one account or another or one form or another, will have any impact on his tax burden.
Did he live in the home anytime in the 5 years prior to the sale ?
Was he reporting the rental on the Sch E each year it was rented and did he correctly take the depreciation as required ? How many years did he rent this property ?