[DonDavis]

It's an extremely high risk, low reward venture.

Let's break this into categories.
First...
The investments you speak of selling to fund the purchase, are you perfectly fine without them in your portfolio?
If the house value stagnates and it becomes upside down, are you good with that?
If you incur the worst luck and pump thousands and thousands into the home, are you ok with that?

Second...
You may know her and are marrying her Mom, but what if things get downright ugly with her in the home?
Will you be able ( emotionally ) to evict her? Talk about that with Mom before you go any further.


If you proceed, document, document, document. And don't forget to document everything, and I mean down to lightbulbs, landscaping, dryer vents, blinds, etc.
Oh, and all three of you should watch Judge Judy a few times. TOGETHER.

This can be a blessing to the entire family, or the wedge that drives you all away from each other. By the way, that tax implications are minor compared to the "family factor".
.02