DEAR BENNY: We recently placed my father, who will be 96 in a few weeks, into an assisted living facility nearby. It's a terrible time to sell real estate right now. But if we have to sell the house, I wondered -- since he is living in the care facility, and not in his home -- how would the $500,000 exclusion work for him?
No one is living in his home and it is still in his name, and bills are sent to me but are in his name. My brother stays there when he is visiting the area.
As I understand the $500,000 tax exclusion, he has to have lived there for two of the last five years -- meaning for him he'd have until he's 101 to do this. He's very healthy -- just has dementia -- so he might very well surprise us by living another five years.