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We wish to sell the house and use the proceeds to keep her in assisted living. Will we have to pay taxes on the appreciated value? Do you think that might be complicated as we received our ownership in several (presumably different-valued) chunks during the process?

A: When your mother transferred ownership to you, you received the property at her cost basis. So, it doesn't matter if she did this all at once or over a bunch of years. If she paid $30,000 for the property, then your cost basis is $30,000.

That is to say, if she gave you 10 percent of the home at one time, your basis would have been $3,000 for that 10 percent share. If, over time, your mother gave all of you the whole home, you could say that your basis for the home would be $30,000. While I have simplified the computation, you can get an idea of what you'll have to pay if you sell.

When computing your mother's basis for the home, you would include the cost of the home itself and whatever capital improvements your mother made to the home over the years: new windows, a new garage, new roof, new bathroom. If the property sells for $200,000, then your profit is the sales price minus the cost basis, minus the cost of any structural improvement to the property, minus any costs of sale.

Because you own the property and not your mother, and neither you nor your siblings lives there as a primary residence, none of you are entitled to keep any portion of the proceeds tax-free. The sale of the asset would be considered long-term, so you would owe long-term capital gains tax of 15 percent, plus any state taxes.

Let's assume the property does sell for $200,000, and the cost basis is $30,000, and with costs of sale and other structural improvements, the profit is about $150,000. That profit is divided by four, or $37,500 for each sibling. Each sibling would pay about 15 percent capital gains tax plus any state taxes owed on that money. You could use the proceeds after that to pay for the care your mother needs.

I know you said that Medicaid is not an issue at the moment, particularly if your mother completed the transfer of the home to you and your siblings more than five years ago. But since the Medicaid look-back period is five years, if your mother transferred the property to you within the last five years, Medicaid could force you to unwind all or a portion of the transfers to all of you to use the money from the home to pay for your mother's expenses.

Please consult with an accountant or estate lawyer to make sure that you have the necessary paperwork in order (a power of attorney would be helpful for financial matters and health matters at this point), and to see whether there are any other ways to assist your mother financially.

Q: We're selling our first home after living in it for six years. Is it true that I can take an exemption from paying capital gains only once in my life?

Our payoff balance on the mortgage is $98,500, and the home is listed with our real estate agent for $169,900. We were thinking that unless we had a profit of $250,000 or more each, my husband and I didn't have to pay capital gains. My mother says, no, we pay it every time we sell, unless we immediately reinvest it into real estate.

A: Your mother means well, but she is wrong. She is quoting you a law, one that has been out of date for more than a decade.

The current tax law allows you and your spouse to keep up to $500,000 in profit tax-free when you sell your primary residence, provided you have lived in the home as a primary residence for the past two out of five years.