Posted by dealmaker on April 12, 2006 at 08:03:00:
Having “elderly” parents transfer ANY capital asset to their offspring is a BAD idea almost all the time. Particularly so in a high appreciation area like CA.
When they die, and you inherit the ppty you will do so at a “step up” in basis. As an example, they bought the house in '75 for $50K, they die next year and you inherit it, but it’s then worth $550K, you sell it for $550K, you owe NO tax on the gain.
Also if they are looking to deplete their assets to gain access to Medicaid, I believe there is a 5 year “look-back” rule. This prevents people from depleting their assets in order to “impoversh” themselves to gain access to Medicaid.
Again, WHY do you want to do this?