So a few years ago we were blessed to be able to buy my parents a home which got them out of the hood.
Our county said that if we wanted to claim homestead exemption to get reduced property tax the house would have to be in my parents name first, then gifted to me and they keep usufruct to the home. I also did that to reassure my parents no one will ever tell them to leave. I had the bank write the cashier's check to the closing company for 400k. if that helps any. We are first gen boat people that came over in the late 70's.
my dad is now 82 and mom is 72. They are not in great health. My only regret was not buying them a house a long time ago. My kids live 600 yards away and now see my parents almost daily.
When they both pass and i sell the house what would my cost basis be?
I was thinking what if you gift someone a stock you bought that cost you 400k. You wouldn't be able to claim a lost on your taxes because you gifted it to your family member. for 10 years that person gets to claim all the dividends but then that person gifts you back the original stock but now it's worth 500k. I'm guessing you would put down your cost basis is 400k and pain capital gain on the 100k. My accountant said if you get audit you can explain what happen to the IRS and simply the fact I have a picture of the cashiers check from the bank to the closing company that states the funds are from me would also help prove what my initial cost is.
