My wife and I have agreed to help her parents sell their long-time residence, and could use some advice.
Her parents are elderly, but we can still communicate effectively with them. We're not so confident they can deal with strangers well; they are at an age where frustration kicks in the minute something gets a little complex, at which point they could easily be confused, or taken advantage of. Fortunately, they realize and accept this, and trust that we'll watch out for their best interests.
They own a home that was purchased back in 1962, and as luck would have it, it's turned into one of the most exclusive areas in Northern CA. They are going to have huge capital gains; their purchase price was $23K for a small farm house, to which they've done relatively little. Still, bare lots that are much less desirable than theirs have sold in the area for over $1M in the last year, and they are surrounded by incredible estates that routinely sell for $3M+. My guess is, they'll get $1.5M easily, possibly more.
Their plan is to move to San Diego, where 3 of their 5 children live - we're the only family that lives close to them currently, and they know we'll be leaving the area in about 4 years. Additionally, San Diego is ideal for them for property tax reasons; they can take advantage of a one-time exemption that allows them to keep their existing and very low tax base when switching primary residences. Since they are on a relatively low fixed income, this is an important detail.
First and foremost, everybody agrees taking care of their current and future needs is the main priority. Switching residences with no out of pocket expenses is the primary goal. However, they have made it clear their estate will be divided between the 5 children, and have made it clear to us they would like to pay no more in taxes than absolutely necessary.
Given the above, are there any strategies we might investigate that will reduce their tax burden when selling?
Thanks much.
Her parents are elderly, but we can still communicate effectively with them. We're not so confident they can deal with strangers well; they are at an age where frustration kicks in the minute something gets a little complex, at which point they could easily be confused, or taken advantage of. Fortunately, they realize and accept this, and trust that we'll watch out for their best interests.
They own a home that was purchased back in 1962, and as luck would have it, it's turned into one of the most exclusive areas in Northern CA. They are going to have huge capital gains; their purchase price was $23K for a small farm house, to which they've done relatively little. Still, bare lots that are much less desirable than theirs have sold in the area for over $1M in the last year, and they are surrounded by incredible estates that routinely sell for $3M+. My guess is, they'll get $1.5M easily, possibly more.
Their plan is to move to San Diego, where 3 of their 5 children live - we're the only family that lives close to them currently, and they know we'll be leaving the area in about 4 years. Additionally, San Diego is ideal for them for property tax reasons; they can take advantage of a one-time exemption that allows them to keep their existing and very low tax base when switching primary residences. Since they are on a relatively low fixed income, this is an important detail.
First and foremost, everybody agrees taking care of their current and future needs is the main priority. Switching residences with no out of pocket expenses is the primary goal. However, they have made it clear their estate will be divided between the 5 children, and have made it clear to us they would like to pay no more in taxes than absolutely necessary.
Given the above, are there any strategies we might investigate that will reduce their tax burden when selling?
Thanks much.