RVR2SNO
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Need some help quarterbacking this...
In short, my mother-in-law (single) is selling her house, paying off my loan/buying mine and moving into my house, and we're buying a house down the street.
My MIL plans to sell her current house. Estimated value is $650,000. House is paid in full. Prop 13 taxes; less than $1,000 annually. The house is in my MIL’s trust.
MIL would then 1) pay off my loan or 2) we'd sell to her for the principal loan balance, which is less than $650,000, and she'd move into my current house. Estimated value is $825,000. Taxes are about $7,700 annually. The house is currently in my family’s trust.
My wife and I would then buy a larger house literally down the street and we have enough in savings to cover the down payment.
Questions....
In short, my mother-in-law (single) is selling her house, paying off my loan/buying mine and moving into my house, and we're buying a house down the street.
My MIL plans to sell her current house. Estimated value is $650,000. House is paid in full. Prop 13 taxes; less than $1,000 annually. The house is in my MIL’s trust.
MIL would then 1) pay off my loan or 2) we'd sell to her for the principal loan balance, which is less than $650,000, and she'd move into my current house. Estimated value is $825,000. Taxes are about $7,700 annually. The house is currently in my family’s trust.
My wife and I would then buy a larger house literally down the street and we have enough in savings to cover the down payment.
Questions....
- Will MIL have to pay capital gains tax if she buys my house or pays off the loan. Trying to avoid her paying CG taxes.
- Can she transfer her Prop 13 taxes? <$1,000 is better than >$7,000, obviously.
- Is it possible to keep my current house in my trust? Or should I sell it to her and then quitclaim it to my trust afterwards?