My 90 year-old mother (widow) is selling her home in Florida. She will profit about $350k over the purchase price 50 years ago. I am POA.

You should NOT do this without the guidance of a tax attorney. 1st off, she will have to pay taxes on the capital gains, less any investment, has to be documented, that increased the property value, ie hardscaping, additions etc.

The IRS will know that mom got the money and it will create flags when her account(s) are suddenly missing 300k.

Get professional advice and consider keeping moms money hers until anyone is entitled to inheritance (after her death). Because the 5 year look back could come in to play with her being 90, you just never know what tomorrow holds, don't put her in a bad situation by trying to hide assets and avoid taxes, it really is not worth it.

Not going into IRS / cap gains issues, but instead I’d like for you to consider the issues on future costs of care & that you think 50K will be a reasonable to cover costs.

If house sale $ is your moms only real source of future significant revenue and she does not also just happen to also have another 200K - 400K or more in savings or investments TO ALSO to use to pay for future care, your mom IMO simply does NOT have the $$$ to gift grandkids or anyone else $. Not 50K each, not 25K each, not $2,500 either. She’s going to need every bit of the 350K and maybe, just maybe, her $ will outlive her and be able to be passed onto her heirs as per her will. Maybe.

So the thought is a nest egg of…. checks notes… 50K will suffice for “her future care”. 50K, well, it will pay for like for maybe 4-6 months at best in a Nursing Home. Read that again dear, 4-6 MONTHS at best.

Costs of care are horrendous and easily run 4-6K for assisted living and double++ that for skilled nursing care in a NH per month on the average. With Memory Care somewhere in the middle. Your mom may be quite healthy and vibrant today but 1 good fall manana and all that can change and dramatically. She could easily need all of the 350 large to provide a place for her to live that enables her & you as her POA to have choices. And to have choices = able to private pay = have that 350K in some way to draw from as liquid $.

Genworth has FL at $4,371 per mo for AL which is pretty good as AL is $6,614 in New Hampshire & NJ is $7,097 on the average for those States. Families often beyond gobsmacked by the reality.

If you are somehow thinking that Medicare or Medicaid will be paying for her custodial cost to be in a facility that will not happen at all for Medicare as its health insurance and doesn’t pay custodial and for LTC Medicaid UNLESS she is able to show with detailed documentation that she is now “at need” impoverished at under 2K in assets and under $2,742 in monthly income with absolutely no gifting or transferring of any assets within the past 5 years prior to her filing for LTC Medicaid program. And also that medically she is documented to be “at need” for skilled nursing care level of services for most States LTC Medicaid program. Otherwise She would have to wait till March or April of 2029 & 5 years from now to ever even consider filing for Medicaid to pay for custodial facility care if she (or you as her POA) should gift you or her grandkids $50K or any other amount of $.

Because as she has recently sold her home, all the details on the sale and to the penny is recorded at the courthouse. Medicaid will want years of banking and financial records. House sale $ is expected to be deposited in her bank account. Between all this, any gifting will surface. Hard part in this is gifting recipient is under no obligation to repay that $. You as moms POA will be the one saddled with having to figure out how to private pay for her to stay in the NH once ineligible due to gifting and to pay the NH any past due owed to the NH and do this for the entire transfer penalty period which is based on days of ineligiblity.

If she was healthy & 80, age works in her favor not to need a NH. But at 90, it doesn’t. As her POA you have a required fiduciary duty so really give careful thought as to how much risk you want to take with her $.

As others have mentioned, Bogelheads is a terrific site for financial advice. But please keep this in mind, at age 90, she is outside of actuarial tables used for risk and for payout. So buying investment products for her will be a bit of a minefield. Choose carefully to whom you speak with and do speak with several type of financial advisers.

The $17,000 annual limit is only the maximum you can give without having to file a gift tax return. If you give a total amount above that, you will have to file a gift tax return. You will not have to pay any gift taxes until you give over the lifetime maximum (too lazy to look that up, but it is in the millions).

I agree with the others that 50 grand is only going to cover about 1-2 years of AL care. In all honestly, I would not give away any of the funds until after grandma passes.

My mother pays $4,800 per month for AL. My step-mother pays $5,700 per month in MC. My mother is 98, your mother could live that long.

Inheritance comes after death, not before.

Under these circumstances the 50K would last a year at best. Then what?

I would get her a good tax preparer and an estate attorney.

Memory care where I live costs $8000 to $10,000 per month. That’s $96,000 per year or more. Just FYI.

Wow! You're so nice--she gets to keep 50K of her own money?!
And you get to shovel out her money and play the benefactor for your kids? Sweet deal!

And then what? Medicare so the taxpayers get to foot the burden?

Her money needs to be used to support her care while she lives-her house, her money.

Does she have a will? If not, why not? You’d better hasten yourself to an estate attorney’s office. Your plan to raid mom’s money while she still needs it for her care is a disaster in the making.

This is fraud and theft? Who in the world gave you the idea that you can use your mother's assets in this way?
You, as POA are LEGALLY responsible to be knowing not to do something such as you are describing.
You need to see an attorney at once. Elder law. You need education in how to do POA and in how to keep meticulous records.
Do know that selling your mother's home and passing money to her heirs WHILE SHE IS LIVING is THEFT and FRAUD.
Those who are POA or guardian are held to a HUGE liability under the law.

I cannot imagine that anyone you have discussed this with has not warned you against such a thing. Your mother's assets ARE FOR HER CARE, not for her children and grandchildren unless she has died with remainders in her estate.

Please get help at once.

Medicaid also does not recognize the 17k that the IRS allows. All Moms proceeds from the house need to be put in an acct in her name and only used for her care. Grandchildren can be named in her Will, which is a "just in case". Just in case I die, just in case I don't spend it all.

Never understood why grandchildren should be thought to inherit a grandparents money. My Will only mentions my daughters. If my daughter wants to give some of her inheritance to her boys, thats up to her. My other daughter has no children so why should part of her inheritance go to her nephews.

First, I agree with others that your mom should not be gifting the proceeds from the home sale right now since you have no idea what her care needs are going to be. If you want her to have the best care possible, you should hold onto her assets to pay for this. Gifting will impact any future Medicaid application. And since she has assets, they should be spent on her care in any case. The grandchildren can be remembered in her will.

Second, as to taxes on the home sale, the first $250,000 in capital gains from a home sale are excluded from capital gains taxes. Moreover, in figuring the "profit" from a home sale (i.e., capital gain) the basis is not just the initial cost of the home but also any money spent on improvements plus any closing costs at the time the house was bought. And the current closing costs at the time of sale are also excludable. You may find that there isn't actually the taxable "profit" you are thinking there will be.