Buy rental from parents as primary residence

[Michelle Lee]

Hi, does anybody have suggestions for the best way to minimize taxes for this? My parents have a rental property, owned free & clear, that they want to sell to me. They want the money as a lump sum instead of monthly payments, and don't want to 1031 exchange to another new rental property, but may use the money to buy a new primary residence in the future. I intend to renovate the house and use it as my primary residence. The house has appreciated about $200,000 since they first purchased it. I have enough for 20% down but not enough to buy it all cash. Is there a way to minimize capital gain taxes for this transaction? What if they add me to the deed and I take out a home equity loan to help them purchase a new house when they figure out where they want to live? Thanks!