My mother's only asset, her home, was transferred to my name through a "care contract" with Florida Medicaid ICP. She qualified for Medicaid, but has for now, gone off Medicaid and moved into an ALF. We are now selling the home to pay off her many debts. Do I include the entire sale of the home as income on my tax return as a capital gain? We have to pay off the loan she had on the house and a large roof repair bill. Can I subtract any of this from the total amount received for the house? She's not going to end up with very much after I pay the bills, if I have to pay capital gains tax on the entire amount received for the house. The house is in my name but, of course, all the bills are in hers.

Thank you, Sandra

The use of a care contract is a fairly sophisticated technique. The answer to your question depends on several unknown factors. Did you claim the "payment" of the house to you as ordinary income or not? Have you considered rescinding the contract and having mom sell the house. I strongly suggest you pose this question to the attorney who helped you set up the care contract.

Sandra - what happened with the sale of the house - were you able to resolve the tax question and pay off her debts? And how is your mother - is she still in the assisted living facility, or did she go back into a nursing home or what? Please let me know. The state of Florida has some programs that can sometimes help some people pay for some of the costs of care in an ALF. (SImilar to ICP Medicaid, but trickier.) I hope all is well with you.