Creative deal structure/capital gains?

Question

Hi BP community!

Looking for some ideas on how to structure a deal. Our potential sellers, who bought their property a little more than a year ago as their primary home, would like to sell quickly for health reasons to be closer to medical care. However, they would like to avoid paying capital gains tax, and thus assume they must remain in the residence for two years. Is there a way to structure a purchase without waiting to close on a sale for the full two years?

Elena Gasol · Answer

Thanks Eduardo!

I actually just realize that they may qualify for a partial exclusion that would cover up to 333k in gains, meaning more than the gains that they have had since they bought, so we could just go ahead with a regular sale  (https://www.irs.gov/publicatio...):

Health-Related Move

You meet the requirements for a partial exclusion if any of the following health-related events occurred during your time of ownership and residence in the home.

• You moved to obtain, provide, or facilitate diagnosis, cure, mitigation, or treatment of disease, illness, or injury for yourself or a family member.
• You moved to obtain or provide medical or personal care for a family member suffering from a disease, illness, or injury. A family member includes your:Parent, grandparent, stepmother, stepfather;Child (including adopted child, eligible foster child, and stepchild), grandchild;Brother, sister, stepbrother, stepsister, half brother, half sister;Mother-in-law, father-in-law, brother-in-law, sister-in-law, son-in-law, daughter-in-law;Uncle, aunt, nephew, or niece.
• Parent, grandparent, stepmother, stepfather;
• Child (including adopted child, eligible foster child, and stepchild), grandchild;
• Brother, sister, stepbrother, stepsister, half brother, half sister;
• Mother-in-law, father-in-law, brother-in-law, sister-in-law, son-in-law, daughter-in-law;
• Uncle, aunt, nephew, or niece.
• A doctor recommended a change in residence for you because you were experiencing a health problem.
• The above is true of your spouse, a co-owner of the home, or anyone else for whom the home was his or her residence.

• Parent, grandparent, stepmother, stepfather;
• Child (including adopted child, eligible foster child, and stepchild), grandchild;
• Brother, sister, stepbrother, stepsister, half brother, half sister;
• Mother-in-law, father-in-law, brother-in-law, sister-in-law, son-in-law, daughter-in-law;
• Uncle, aunt, nephew, or niece.

Eduardo Bilbao · Answer

I don't think there is. Otherwise all the flippers would do this all the time. But I am not an expert in the subject, therefore I will stick around to see what others say. Good luck!