All Forum Posts by: Dana N Johns

@Dana N Johns: Just a couple of thoughts

Talk to a real estate knowledgeable, CPA, not to your standard CPA and not to unknown investors on some forum in the ether for a matter like this.

Now, if your mother has lived in the property for two of the last five years, she is entitled to a tax break on capital gains if she sells or if the title changes hands (basically sells using creative finance).

However, if you inherit the property, there is a tax advantage to you in terms of stepped up basis and capital gains and a tax advantage to her from incurring capital gains if she is outside of the “two of the last five years” window.

As far as the Medicaid situation, that is best explained by a CPA or tax attorney or Enrolled agent. There may be other options there.

But, from a strategic angle, that is where a random guy on the internet jumps in and says "You might be able to buy the property from your mother on a Lease Option" that you make the payments and maintain the house with the option expiring on her passing date, converting back to her estate which you and any other heirs will inherit".

She can have in her Trust, what happens to the property on her passing, so that for instance, if you are the only heir, or the only heir she leaves the property to, you can transfer ownership quickly instead of having to go through probate. I don't know what the transfer fees in PA are for Trust transfer of properties but in some states it is waived. A CPA, Tax Attorney, Enrolled Agent can fill in the rest. If they say you can’t do a Lease Option on your mother’s property, ask them kindly, “can you show me in the statute what you are talking about?” They can’t. Have them focus on saving you both, taxes of all kinds.