Capital gains tax

[Eric Doud]

several years ago my parent build a cabin in Montana that they estimate is worth and would sell for 750,000 to 800,000. This is there primary residence, and are married so they would be able to keep the first 500,000 tax free. They own the property free and clear. Is there Any way around this? Could the do a cash out refinance for say 300,000 giving them something to pay off when they do sell so they would only clear 500,000 at the sale. If this is the case how long before they sell do they need to do the cash out refi?

[Wayne Brooks]

Talk to a CPA.. Even on this board, there are some crazy dead wrong suggestions.  Doing a loan has absolutely no effect on cap gains...that's just scary someone suggesting it does.  1031's can't involve a primary residence.  If the cabin was only built "several years ago" and assuming they didn't build it for free, I'm guessing their basis is at least $250-300k which puts their gain under the $500k cap, as @Cal C. pointed out.