Selling a property that I bought to help a friend

[Larry B Hurt]

I have a friend who had been in a rent-to-own agreement for 3 years.  He had built quite a bit of potential equity, due to part of his rent applying to the purchase and due to the house rising in value.  His option was expiring, he couldn't qualify for a mortgage, and was about to lose this potential gain.  I stepped in and bought the house on Feb 28, 2019 for $136,000. I am selling it on March 2, 2020 for $187,800. He has lived in the house during this time. I plan to give him the net proceeds after deducting my costs and any taxes that I will have to pay.

I have assumed that I will have to pay long term capital gains tax.

He talked to a CPA who told him that if we had a signed agreement showing that I only did this transaction for him, that he received the money, and that I was not doing it as an investment or to make any profit, then I wouldn't have to pay taxes on the transaction.  I talked to another CPA and he said, "NO WAY".  I would appreciate any opinions on this situation from a qualified professional or someone who has encountered a similar situation.