Housing Option

By: fedweek

Here’s another way to handle the sale of your home. You could sell your house to another party, perhaps a grown son or daughter, and rent the house from the new owner. Such a sale will be tax-free in many cases because a married couple owes no tax on up to $500,000 of gain on sale of a principal residence. After a sale-leaseback, the new owners may enjoy the tax benefits of owning investment property while you have extra cash and the opportunity to stay in your home. Be sure that a fair value is paid for the house–this avoids hard feelings within the family (as well as problems with the IRS).