(Question for USA taxes.) Let's say that
- I have one remaining parent who is quite advanced in age.
- I own an investment house that has appreciated in value significantly.
- I want to sell it eventually, but not any time soon.
- I want to pay less capital gains tax (and depreciation recapture tax) when I eventually sell, if possible.
Is the following a viable tax strategy?
- Gift the house to my one remaining parent. Basis is transferred.
- Inherit it back when my parent passes away. Basis is stepped up.
- Sell the house for zero capital gain (and zero depreciation recapture).
Does that work?