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BK-CPA
BK-CPA, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 933
Experience:  Owner of a CPA firm
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My grandfather signed s house over to my mom 4 years ago and

Customer Question

My grandfather signed his house over to my mom 4 years ago and my mom has rented it to us since then. We are not ready to move and my mom wishes to sell. Is there a pro to holding onto the house and not selling it until the 5 year mark?
Submitted: 11 months ago.
Category: Finance
Expert:  BK-CPA replied 11 months ago.

Hello and thank you for your question.

No. There is certainly no tax incentive to hold a rental property for five years. There are no immediate legal or other incentives either.

Absent any desire to provide a house for other family members, the decision in your mother's case should be purely economic. Is she going to make money by continuing to rent? Does she want the cash flow from a sale for other things? Is her income expected to be steady from year to year where the relative income tax incurred on the sale won't change as to amount, only timing?

The above questions are things you could ask your mother I suppose. The economics will of course differ for any given person at any given time. You have to assume that your mother is doing what she feels is best for herself given her personal motivations and goals.

Customer: replied 11 months ago.
My questions was pertaining to Medicaid, not just financial. I thought I asked it in the Medicaid section of the website. There is a 5 year look back period for Medicaid. I was wondering if there was a difference between keeping it until that 5 years was over or if selling it made any difference. My mother believes that keeping the house will protect her money if my grandfather had to use Medicaid for long term care.
Customer: replied 11 months ago.
In my original question...I meant to say we are NOW ready to move. My mom doesn't wish to sell until that 5 year period is over in fear of losing her money to Medicaid.