When is the best time to sell a parent's home when they live in an assisted living facility and won't be returning?

Andrew asked...

When is the best time to sell a parent's home? My mother is now living in an assisted living home and will not be able to return to her own home. The home was placed in my sister's name and mine on the death of my father in 2002.

Expert Answer

Steve Weisman hosts the nationally syndicated radio show A Touch of Grey, heard on more than 50 stations, including WABC in New York City and KRLA in Los Angeles. He is a practicing lawyer specializing in estate planning and is admitted to practice before the United States Supreme Court. He's a public speaker and commentator who has appeared on many radio and television shows throughout the country, and he's the legal editor of Talkers magazine, the preeminent trade publication of talk radio. His latest book is The Truth About Avoiding Scams.

If your mother transferred her home to you and your sister in 2002 and she's no longer able to live in the home and isn't likely to return to it in the future, the decision whether to sell the home becomes a business decision for you and your sister.

The real estate market is not particularly good at this time so if you're willing to undertake the job of becoming a landlord, you may want to put off selling the property and rent it out instead. Even if you don't want to be a landlord, you may want to look into the cost of having a management company manage the property on your behalf. It will cost for these services, but you will avoid the headaches of being a landlord.

If you prefer to get rid of the property and sell it, you will pay capital gains taxes on the difference between the price that you sell the property for and your mother's tax basis in the property. Your mother's tax basis in the property is a bit complicated. Assuming that she and your father owned the property together at the time of his death in 2002, your mother's basis when she gave the property to you and your sister would be the total of half of the value of the property at the time of your father's death plus half of the original purchase price. You should consult an accountant to get an accurate indication of the tax ramifications of the sale to you and your sister.