Brother Paid Off Loan

[gman]

Taxpayer owned 2nd home which parent lived in. Parent moved to nursing facility and brother of the taxpayer paid off the loan and property was transfered to brothers name.

Would this be handled as a sale of the property? This all happened within a two year time frame.

[Burke]

Yes, this would be a sale reportable by the seller. What does the 2 years have to do with it?

[AJsTax]

If

Yes, this would be a sale reportable by the seller. What does the 2 years have to do with it?

this would be a reportable sale if the parents did not meet the rules to exclude the gain.
If they meet the 2 out of five years requirements, there is nothing to report, it is a exempt sale of the primary residence.

[HBurkholder]

This would be a reportable sale with the sale price being the amount of loan. It would not meet the requirement for the sec.121 exclusion as it was not the taxpayers primary residence.

If however it had been their primary residence prior to the parents moving in it may qualify for the excusion if they had lived in it for two of the past five years.

[Burke]

this would be a reportable sale if the parents did not meet the rules to exclude the gain.
If they meet the 2 out of five years requirements, there is nothing to report, it is a exempt sale of the primary residence.

According to OP, the parent only lived in the house. It was owned by the client (2nd home). Therefore, no 121 exclusion.