My father has months to live and he currently has a 30 year loan for a condo that he lives in. He has some equity (@ $23,000). If we decide ...

Question

My father has months to live and he currently has a 30 year loan for a condo that he lives in. He has some equity (@ $23,000). If we decide that we want the condo for investment purposes, would it be to our advantage to purchase the condo from him before he passes?

Answer

Probably not a good idea to purchase it before death unless you need the cash in his estate before he dies for some reason. Whoever inherits the property will get what's called "step up basis" (meaning the value on the date of death is what will be treated as what was paid for calculation of income on a future sale). If you buy it from him then your basis will be what you pay.