Hi gurus!

SUMMARY:

My parents want to transfer their interest in our co-owned property to me, receiving back only their initial investment. The property value has increased by $400k. How might we do this and avoid/minimize the tax consequences?

DETAILS:

My parents and I purchased a rental in California in 2000 as tenants-in-common.
The paid 75% ($75k) of the down payment and closing costs; I paid 25% ($25k).
They own 75% and I own 25%.
We were all on title and on the loan.
In 2014, I refinanced them off the loan (they remain on title).
We are all residents of California.
The purchase price was $500k.
The current value is $900k.
We signed, but did not record, an "Equity Share Co-Ownership Agreement", specifying our mutual obligations.
From the beginning, I have managed the property and retained 100% of the rental income and paid all of the expenses.
We have each filed Schedule E and depreciated our respective ownership interests.

GOAL:

Now, we would like to transfer ownership solely to me and return their initial investment ($75k) to them.

The issue of the county transfer tax is secondary (my present focus is on federal and state taxes) but I welcome any comments on that, too.

What is the best way to accomplish this?

Thank you for your advice!