u/65jax

I’m looking into buying a house that will solely be paid for by myself. However, I’m exploring adding my parent to the deed. We will both live in the new home.

I’ve recently come across several places that state this may not be the best move due to capital gains upon death. My parent’s income is below the threshold to trigger paying taxes on any capital gains. However, with my income it looks like I’d pay ~$75k.

I just saw info on the look back test and am not quite sure how it works. If we both lived in the home for several years and, let’s say my parent dies first, would I get any financial reprieve for also living there for at least two out of the five years? If so, would I no longer have to pay the $75k?

This is the first time I’m doing anything concerning estate planning or planning for a potential death (hopefully no time soon) so I apologize if this reads weirdly. Trying to get the info without actually thinking about either of our deaths.

Thanks for any assistance.