Rental Property Investor · SF Bay Area, CA · Member since 2015 · 206 posts · 156 votes
Hi BP Fam! Have a situation where my mom and her siblings are looking to sell their elderly mother’s single family house (who is alive and moving to a care home).
There is a living trust in place. Wondering what sort of taxes and fees they will incur as a result of selling this house?
House is located just outside of San Francisco. Bought for $79k in the 1970s and now worth around $1M.
PS - I would be interested in buying this house, but there are some family issues around jealousy, etc. and my mom won’t inform her siblings of my ability to purchase. Owner finance is tough with grandma’s mental state.
You’re facing at least an extra $100k in federal and $50k plus in state taxes if she sells while still alive, though if she’s receiving Medicare they’re ll want their money from the proceeds either way. If you think she’ll be in the nursing home more than 5-10 years you probably sell. Otherwise you’re saving $150k to wait.
IF you really would want it, even near market value then you get an appraisal and pay 3-5% less than that the realtor would have gotten anyway. You could owner finance with a big downpayment to solve her money issues while also lowering her taxes a little.
Everybody’s situation is different. Good luck and all my best wishes for her health.