I want to buy my parent's house, then rent it back to them.

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I want to protect the house from being sold to cover nursing care cost. I know I will have to one the house for 5 years.

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thank you very much!
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You need to consult an elder care/medicaid attorney. But the way I as a clueless person understands it, the lookback period is for qualification and not recovery. So look into placing your mom's house into a trust. Once in a trust, it will no longer be subject to recovery when she dies since it's no longer her property, it's the trust's property.

As for the lookback period for qualification, her residence is exempt thus it shouldn't be disqualifying.

Thus putting it into a trust should protect it from recovery and not effect qualification as I understand it. But please see an elder law/medicaid attorney.
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Thank you.
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“Working” Farms and ranches in my understanding are exempt from asset list and from estate recovery for Medicaid. Size doesn’t matter. For TX, ranches can be huge, like dozens of sections, thousands of acres as you need more land for cattle to graze on than other places. 

SingingFarmer, you’ve posted onto an old thread.... 6 years old. You may want to do your ? As a brand new post. My post from 6 yrs back on capital gains & inherited is murky..... my understanding is sales price less inherited value & cost of sale = capital gains

..? for you, your post reads that your dad QCD the house & farm that mom & he have owned to instead become via the QCD just owned by your mom? You might want to clearly check with an elder law atty & one with real estate experience as to if this could be or is a problem as it could look like dad “gifted” his share of the ownership to her. Really (& you’ll read this over & over on this site) when it comes to Medicaid for couples it is way way more complex that doing an application for a widow or widower solo parent. Really not a DIY. Your folks need to meet with an experienced elder law atty, I’d suggest one that is CELA or NAELA.
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SAVE THE FARM concern: Man, Oh man, I feel lucky to have typed in, "can I buy my parent's home on owner contract, to protect from NH future". finding Aging Care.com. While I did not exactly see that question/answer, I think it must be no, regarding Medicaid's 5 year look back. Much like gifting. And renting back to your parents. One part that Igloo572 mentioned about leaving the house empty. I wasn't clear on that. Here is my thing: we are presently getting my dad qualified for DSHS as dementia rapidly arrives. We are doing a quick claim deed to my mom. Mom is healthier but 81. They own their home. 6 acres. I own my home on the other end but not the land. I farm the land here in NW Washington. Of course my fear is mom goes for NH care and forced to sell farm, losing my home and living, too. But as single woman farmer, I cannot convince a bank to let me buy all. Don't make enough. So, just looking for any possible hidden ideas to SAVE THE FARM. We grow healthy produce to feed the hungry. Pretty cool. But when it comes to parents, land, long-term care, farming doesn't matter. I welcome any information you care to share. THANK YOU!
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Wow. I would like to know how homesteading protects one from capital gains? I had my home homesteaded in 78. Wow. Yes, do check into all the issues mentioned above. However, I think capital gains would be charged to your parents, the seller, and not you. Also in some CA counties you can take your taxes with you. For example my taxes are 1k a year. If i go to a new property I can take the 1k with me and that is what my new property taxes would be.
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Igloo, thanks for sharing your wealth of experience-always so much to consider as a caregiver. I am a fan of elder atty's., too.
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Oh I forgot, there is the "ownership and use test" for capital gains. Which usually means did you get a valid homestead exemption or claim the property as your principal residence for either 2 or 3 years before the sale. IRS has lots of info on this but it makes my eyes glaze over to understand and you eventually need an attorney to deal with it.
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It's my understanding that when dealing with inherited property and capital gains the FMV - fair market value of the property on death is what counts. This can be good or bad really depending on your situation and what state you reside in. You can carry your taxes with you at the same rate in CA? - how does that work when the property value differs?

I was executrix for 2 estates - 1 very involved and the other easy- and one thing that kept coming up was the huge change in property valuation and how to best deal with it. For parents who bought their home or other property for 20K to 50K when they got married say in the 1950's or 60's there likely has been a huge butt increase in value easily over 100K and maybe over 500K. Now by & large the parents taxes are frozen so they don't care about the increase and sometimes are even excited when they get the annual tax assessor bill because the house is "worth" so much but their still paying 2K in tax while the neighbors are paying 8K. In reality the house likely isn't "worth" the assessor's report because: 1.the current assessment was increased in the go-go real estate years from 2002 - 2007 and they have not had the assessment lowered to reflect the current real estate situation and/or 2. it has decades of delayed maintenance or hasn't been renovated etc because it's still basically an old 1950's tired house but the assessment is based on comps which likely are renovated homes. Then they die and the FMV at death is the increased assessor value and the inheritor faces a capital gain. With my aunt in her will, she left properties to a nephew who lives in an state that has BOTH inheritance and estate taxes (nothing but fun there) so between the inflated assessed FMV and capital gains, he decided to decline the property. I had an estate/probate attorney I worked with as executrix and he got a tax attorney to do a consult on the whole property issues involved (he did an alternative value date rather than FMV) - I will say capital gains are super sticky to deal with and tax laws change and into it is well worth getting good legal that knows the specifics in how your state works.

One thing I did with my mom's house years ago, was to ask the assessor for a hearing on the house's value. For decades it stayed relatively flat, then in the early 2000's it skyrocketed as did property everywhere. I took in photos of settlement damage, etc and repair estimates and had roughly 50K taken off. Which now in retrospect was really a good move as it decreases the amount that Medicaid's MERP program can base recovery on after her death (my mom is in a NH on Medicaid but still has her home) as the assessed value is lower.
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Wow. I would like to know how homesteading protects one from capital gains? I had my home homesteaded in 78. Wow. Yes, do check into all the issues mentioned above. However, I think capital gains would be charged to your parents, the seller, and not you. Also in some CA counties you can take your taxes with you. For example my taxes are 1k a year. If i go to a new property I can take the 1k with me and that is what my new property taxes would be.
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