<prompt> Human: Hi all,My good friend and his family siblings, parents have been in dire financial straights the past number of years but the upshot was always that they owned a rental property in an expensive area that they planned to someday sell. My friends mother had inherited the property and they planned to eventually sell it and use whatever equity it had to pay off some of their personal debts. A few years ago, the parents decided to sell the property for 1 to my friend and his siblings because they thought it would protect the house from creditors, and the family all lives together and share their resources so whats the harm - its just a change in ownership on paper, right? It seems they might have miscalculated because now that theyre on the verge of selling it, they were told that my friend would owe an enormous capital gain sum around 100k because he purchased the house for a dollar and is selling it for a small fortune. This all seems unnecessarily cruel to a family that is on food stamps and is on their last leg. What Im wondering is A is this true - do they really owe this tax? and B is there any way to reverse the ownership or remedy the situation otherwise?Thank you  <response>: Yes they do. If you live in the home for 2 years, that removes 250k worth of capitol gains, 500k if they are married.People should really seek lawyers and accountants when trying to put together massive financial plans to avoid situations like this. Anyone half familiar with real estate and taxes could have told them this would happen. 