Taxpayer and spouse want to sell their primary residence to their son and take advantage of the IRC code sec 121 $500,000 exclusion of capital gain. As long as the residence is sold to the son at fair market value is section 121 allowed when it involves a related party.
In order to be a valid arm's length transaction, the sale to the related party should be at FMV? If the sale to the son is at a value less then FMV does that constitute a gift?