Part of the Deficit Reduction Act where I can transfer to my son my half of the house without penalty. He has been my caregiver for years and we have both lived together for about 13 years. I consulted a lawyer who said I could do this legally without penalty but social services is treating me like a criminal when I took it all in and told them.
If I remember right, the IRS will let someone realize a capital gain on one house without taxing it. This may not be true anymore. I don't sell houses often enough to keep up with these things. :)
I noticed we switched persons from mother to son. I'm not sure if Medicaid is even involved. Medicaid does have really picky requirements -- that the house is your primary residence, you have been a full-time caregiving heir whose help allowed your mother to stay out of a nursing home. I'm sure the lawyer checked to make sure all your ducks were in a row.