Can I sell my mother's house as POA? 8 Answers as of July 20, 2015

My mom has made me Power of Attorney. She is in a nursing home and will not be able to come back to her house. My brother has lived there for over 10 yrs with the last 2 yrs not paying rent. Can I sell her house as POA while he lives there so that it doesn't go thru the probate courts. Will it make a difference in amount of taxes if I sell it before or after she dies.

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WFB Legal Consulting, Inc.
WFB Legal Consulting, Inc. | William F. Bernard
If she does not have an estate plan that otherwise calls for the specific distribution of the home without reservations, and the POA empowers you to sell her personal assets, then you can work within the framework of the POA.
Answer Applies to: California
Replied: 7/20/2015
LAW OFFICE OF ROBERT I LONG
LAW OFFICE OF ROBERT I LONG | Robert I. Long
Please exercise caution here. Is the nursing home expense or any portion of it being paid by public benefit, such as Medicare? If so, she probably qualifies for assistance because the home is not considered an available asset in determining eligibility provided she intended to return to it when she recovered (regardless how unlikely that now appears). However, if the home is sold, the proceeds belong to her, and the money does not constitute an exempt asset for purposes of eligibility so the entire nursing home expense must get paid with the sale proceeds until those funds are exhausted before Medicare will again pick up the cost. You will also incur capital gains taxes on the sale, with the difference between what she paid for the home and its selling price being treated as ordinary income in the year of sale. If the home is kept until after she dies, it receives a free step-up in basis, meaning there is no capital gains tax on a sale for the date-of-death value. Those factors suggest it may not be wise to sell while she is alive. Your power of attorney may give you the power to impose and enforce reasonable rent on your brother, but for that you are advised to seek assistance from an attorney.
Answer Applies to: California
Replied: 7/16/2015
Law Office Of Victor Waid
Law Office Of Victor Waid | Victor Waid
You can only sell your mother's house if the POA was specific as to the house giving you that specific power. But as to the occupant of the not paying rent, you need to engage a lawyer to file with the court an unlawful detainer action to boot your brother out of the house; you have a duty under the power to protect your mother's assets. When she dies, you will have to go through probate.
Answer Applies to: California
Replied: 7/13/2015
Patrick W. Currin, Attorney at Law | Patrick Currin
In general, it would be preferable to sell after death to receive the stepped up basis. You do not have to sell the home to evict the brother, however.
Answer Applies to: California
Replied: 7/13/2015
Law Offices of George H. Shers | George H. Shers
You need to read some books on probate, landlord/tenant law, and taxes before you do anything. With a properly worded power of attorney, you could sell the home but why not have her sign the final papers, if she clearly is mental competent, to avoid problems. Your brother is not going to want to leave and will probably argue he does not have to pay any rent, so you may have to file an unlawful detainer action against him, but your mother is likely to refuse to do anything harmful to one of her children [my mother wouldn't, much to her economic loss and my pain and labor] so that may not go any where. If she sells the house now [no one will buy it at full price with your brother in it because they will have to file an unlawful detainer action], she has to pay capital gains on the difference between the sales price and what her "cost basis" is [original purchase price plus repair costs not claimed on past taxes forms, etc.]. In California, the first $250,000 in capital gains is state tax free. If she is on MediCal, etc., the governmental agency will probably want some of the money. If you wait until she dies, then the house for tax purposes takes the basis of the fair market value at the date of her death, there are no taxes on the first $5 million in assets, and the house has to go through probate, which can be very messy [your mother will probably not want to cut your brother out of her Will and he will try to influence her to give him as much as he can get away with]. You probably will need to go with her to some local attorneys to figure out the best way to handle the problems. Be warned, it will be messy and if you are the "good" son in the family, you will have to do all the work for free, have your brother very upset with you, not get your mother's support when needed, and often wish you never got involved.
Answer Applies to: California
Replied: 7/13/2015
    Irsfeld, Irsfeld & Younger LLP | Norman H. Green
    Yes, you can sell the house. If her gain would be less than $250,000, she won't have any income tax to pay on the gain. If it would be more than that, she will need to report the gain and may owe some tax. I could help you determine which will be best.
    Answer Applies to: California
    Replied: 7/13/2015
    Law Ofices of Edwin K. Niles | Edwin K. Niles
    Yes, you can sell using the P/A, assuming it is in good order. If you sell now, you may have to pay a capital gain tax if the property is worth a lot more than she paid. If you inherit the property, however, you get a stepped-up basis so that when you sell there is little or no gain.
    Answer Applies to: California
    Replied: 7/13/2015
    Danville Law Group | Scott Jordan
    It depends on what powers are granted to you in the POA. I would have to read the POA to advise on whether you can or cannot sell the house. As to taxes, it would be better to sell the house after your mother passes because of the step-up in basis the estate will receive. You may want to consider placing the house in a trust so that you can avoid probate when the time comes. I strongly suggest you contact a local estate planning attorney for follow-up and assistance in getting your mother's financial affairs in order.
    Answer Applies to: California
    Replied: 7/13/2015
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