Need Help For Senior Friend
I have a 75 yr old friend who in 10/01 bought a home for his son to live in after he died. However, unfortunetly his son died first. He can't take care of the home and wants to sell now. It is his first and only home. He will have $40,000-$50,000 in profits. Is there any exemptions available for seniors? The home will sell before the 2 year required period. Any suggestions or feedback would be appreciated. Thanks 
lease option
lease it with a larger downpayment and a short term, then the tenants are more likely to buy, set it up with a future sale price. Don't set up to sell it tommorow for todays prices.
If he sells he will not pay capital gain,20% he will pay income tax 30% , he never occupied
WHere is the 75 year old man living? If he needs an apartment I might suggest a 1031 exchange and let a management company manage the property. That way he can defer the taxes until he either sells or dies.
Ther may be some other manuevering such as putting it in a "C" corp where you would pay a max of 15% but this would require and attorney and probably a tax advisor.
Good Luck!
I wonder where this man is living now. It is not clear whether this property is his current primary residence, and whether he has been living in it since he purchased it.
If he is living in the property and sells now, where will he live then? Since Oct 03 is less than 90 days away, it would seem perfectly reasonable to put the property on the market now with an availability of Nov 1. Even if the property goes under contract quickly, the settlement date can be specified as a date in late October, so that the seller meets the two year rules.
Even if he decides to sell now and incur a taxable capital gain, the maximum capital gains tax rate is only 15% at this time -- no need to establish a complicated and costly corporate ownership entity when there is no tax savings.
Quote:lease option -- lease it with a larger downpayment and a short term, then the tenants are more likely to buy, set it up with a future sale price. Don't set up to sell it tommorow for todays prices. If he sells he will not pay capital gain,20% he will pay income tax 30%, he never occupiedDavidBrowne,
You lost me here, why doesn't the capital gains tax rate (now 15% maximum) apply under your lease option strategy, regardless of when the option is exercised??