Well for income tax
purposes, there isn't a problem as your mother will be able to exclude up to 250K profit on the sale of her principal personal
residence. So there is o taxable gain
& no reporting
for income tax purposes.
As far as Medicare is concerned, there is no problem there as Medicare isn't need based; qualification is based upon age or disability
The same with social security, if she is collecting regular social security or Social Security Disability income (SSDI).
If she is on SSI (Supplemental Security Income) or Medicaid, then her benefits could be affected, as she will have the cash from the sale of the condo & those programs consider assets
& income from all sources.
If she isn't on Medicaid at the moment and were to make a transfer of the equity in the home back to your brother, that could create a problem down the road as there is a 5 year "look-back" disqualification period where she would be ineligible for Medicaid for some period of time because of the transfer.
If the down payment and all the payments for the condo were made by your brother, perhaps a Medicaid planning
attorney could draft affidavits to be signed by your mother & brother that the title to the condo was held by your mother as a matter of convenience for your brother and there was no gift from your brother intended beyond the use of the condo by your mother.
However, if that were sufficient to preserve your mother's SSI benefits as well as not disqualify her from any Medicaid benefits, then that advantage would have to be weighed against the potential that the sales transaction
could be taxed to your brother. To the extent that your brother doesn't have any significant other income
, even if that were to occur, the tax could be minimal or even zero.
The only way to determine that would be to do a pro-forma income tax return
for your brother and see what his income tax might be if the gain on the sale of the condo were included in his tax return.
Please remember to click on the green "ACCEPT". Feedback if you have time and bonuses where you think they are warranted, are always most appreciated. Thanks again for using our service. If you'd like to contact me again, just ask for "Steve G" at the beginning of your question.