Legal Question in Real Estate Law in Massachusetts

First, the value of the Condo if sold would be prorated between your parents remaining life estate and your residuary interest. Your parents would have an exemption for up to $500,000 jointly ($250,000) each.

You take the property at the lesser of your parents basis at the time of gift or the fair market value. By way of example, if at the time of the gift the home had a value of $100,000 and was purchased for $50,000 by your parents and the value of the life estate at the time was 55%, then your basis was $22,500. You pay a capital gain on the difference.

I suggest you speak to an attorney or accountant and determine the best way to handle the sale so as to protect your parents rights to medicare and medicaid and at the same time minimize your taxes.

Please feel free to contact me without obligation.

You need to speak to an elder law attorney with a real estate practice.

I agree with Attorney Jacobson. If you would like to speak with an elder law attorney with both estate planning and medicaid experience, please contact my office and press "1" for Carol Barton. Best of luck!