Judgment against sibling causes sticky sales situation.
Is there any way to get around this so the house can close? Everyone wants their money!
A. Never mind the broker; double-check with your attorney or a CPA. I'm not a lawyer, but I believe the judgment can be charged only against that sibling's one-fifth share of the proceeds.
Evidently, that won't yield enough to pay off the full debt. But perhaps the creditor will agree to release that claim on the property in return for collecting at least part of what's owed.
Let me know how it comes out -- I'm interested.
* In your reply to A.J.H., you said the Medicaid look back period is three years. I believe it used to be three years but is now five years.
* I just wanted to comment that I believe the look back for Medicaid eligibility is five years, not three.
* My state does a five-year look back. If a person has transferred real property for less than market value during that five-year look back, he or she may not be eligible for Medicaid for a period of time called a transfer penalty.
In some situations a penalty would not occur. People should reach out to their local department of social services for advice.
A. Yes, you're all correct. I was quoting federal rules. I should have realized that individual states can set their own look back periods where Medicaid eligibility is concerned. In almost all states it is indeed now five years.
Q. In 1997 my parents signed their home over to me and my two siblings. We just sold the house. Is there capital gains tax to be paid, and would it be based on the assessed value of the home at time of transfer in 1997?
A. When you received the house as a gift, you also took over your folks' cost basis for the property. You can add to that anything you or your siblings have spent on permanent improvements (but not repairs) since 1997.
Q. I read with interest J.D.'s letter about turning his single-unit home back into a duplex. I was in that same situation 10 years ago. Rather than hiring a lawyer, I went first to the zoning board, and, of course, I was turned down based on the neighbors not wanting a duplex.
I then went to the library and found that the city directory never listed it as a single-family home, so I made copies of the directory from the first year I found to the last one.
I went to the zoning board of appeals and won! Sometimes a little work gives you more satisfaction than just paying a lawyer.
A. Thanks for sharing your experience.
Q. Last January my wife and I moved back up north after years in Florida. We purchased a home on Jan. 30, 2017. If we sell our home within 12 months, will there be any tax implications for selling the house before the five-year requirement expires?
I'm a five-tour veteran of Vietnam with the U.S. Marine Corps. Any information that you can provide will be greatly appreciated.
A. If you're selling your present house after such a short time, subtracting selling expenses might give you a capital loss on the sale. For your own home, that loss would not be tax-deductible. If you do have a gain, it would be subject to regular capital gains treatment.
If you're asking about the sale of your Florida home, you could take the homesellers exemption from some or all capital gains tax if you owned and occupied the home as a main residence for at least two of the five years before the sale. Under some circumstances, those in the military can have a 10-year postponement, but that wouldn't apply here.
Thank you for your service to our country.
* Contact Edith Lank on www.askedith.com, or 240 Hemingway Drive, Rochester NY 14620.
[umlaut] 2017, Creators Syndicate