My mother would like to gift her $850K house (100% owned; no loan) to my wife & me. At the same time, my wife & I would sell our $1.5M house ($1.4M is equity), and use the proceeds to 1) transfer $475K cash to my mother, 2) remodel her house (which my wife and I will live in) for $150K, build an ADU (which my mother will live in) for $200K, and 3) invest the remainder.
I believe the gifting of the house to my wife & me won't have any tax implications aside from our remodeling that may result in a reassessment with a property tax increase. I'm concerned, mostly, about tax implications that would arise from my wife and me gifting my mom the $475K.
Any thoughts or suggestions about the entire plan?
Thank you very much.
@Eric Bailyn this forum is more for financing and lending types of questions. Bigger Pockets has a forum designed just for this type of a question under "Finance, Tax, and Legal". Use that forum for better/more responses to this question.
Thank you, Andrew. I re-post my question in the "Finance, Tax, and Legal" forum. Appreciate the guidance.