I have POA for my 85 yr old mom with AD. She owns her home but has been living with my husband and I at our home. She has a Home equity line of credit and we have had to use it to pay medical bills( hospital stay, rehab and respite care) and her cost of living as well as repair her home (was in dire need of repairing) as we wanted to rent her house out to help pay her bills etc. We are currently renting it out but I have my hands full with taking care of her and still a teen living in my home and just want to sell it and be done with it and not worry about the upkeep and renters etc. If we sell it I know the Home equity line of credit will be paid back to the bank first then the rest will be hers. At that point am I able to put that into savings to use for her care or is it required to re-invest it into property or be taxed if we don't.

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I didn't even think of writing off the improvements. It was the furthest thing from my mind. I was just trying to get it into condition to be rentable. And you are right it is not worth millions. An average home. It does sit near some valuable property that has been trying to sell commercially for 15 yrs now but nothing it moving at the moment any way. I just thought if I could get it on the market then hang on until I get a bite. Thanks for the info

My first thought is there should be no tax to pay because this was her primary residence and at her age she is entitled to sell it, pay no tax and there is no requirement to reinvest. Then I wondered if you changed the status of the house to income property, writing off improvements on your mom's last income tax return, as you would on a rental property and claiming rental income. If you did that, then I'm not sure.

I'm assuming that you just fixed the house up and rented it out and did not try to write off the improvements. I am also assuming that the house is not worth millions. If so, I don't think there is any concern about taxes when the house is sold. You don't need to reinvest and you can put the money in a savings for her.

If you have other reasons for asking this question, something you didn't mention, it would be best to check with a CPA.


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