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Will I have to pay capitol gains on a property I just bought but lived in for two years with a lease-option?

two years ago a friend and I bought and moved into a house together with a tic agreement, and then we created a lease option agreement between us that I would buy his share of the house after two years. This was a contract between him and I and it wasn't notarized. I gave him a non-refundable down-payment and I pay the mortgage. Now as am am about to get the financing to buy his share out-right. Then I would like to sell the house. Will I have to pay capitol gains tax on profits from my partner share that he sold to me, considering I only just outright bought the house, even though I have lived there for two years and agreed to buy it two years ago and payed him some then and payed the mortgage since?

Public Comments

1. No, if your name is not on the title, it is not a purchase, therefore, not subject to capital gains.
2. You really should ask a tax specialist. But I bet if you sell it right after you buy it you will have to pay capitol gains on any profit (difference from purchase price and sale price). If you live there and own it as your homestead for another two years I bet you wouldn't have to pay any capitol gains tax.
3. Yes, You will pay capitol gains. The rule is to have lived in the property 2 out of the last 5 years, but this is assuming you are on title. Since you will only be on title for a short time, you will have to pay capitol gains.