Use Gift-Leaseback on your parent's home. Say your parents are living in their home mortgage free! They are not getting many deductions and probably don't have enough deductions to itemize with just their property taxes. Moreover, they can't deduct their insurance on their home, repairs etc. Here is a genius solution for all my friends reading this post that will work for everyone.
Use the Gift-Leaseback technique. First, get a fair appraisal of the parent's home. Second, buy the home at that appraised price. Third, lease the home back to them at fair rental value, although courts do allow a 20% discount from fair rent because your parents will make a good trustworthy tenant.
You might be asking, "Where can I get the cash to buy my parent's home?" The answer is that your parent's can be your bank. They can fund 80-90% of the purchase price with a note. There is a minimum interest that must be charged too as noted by the applicable long-term federal rate that you can get on the IRS's web site. As of this posting it is 4.25%.
Thus, each month, you will get a rent check. You will in turn pay your parent's note. Thus, the cash flow will be fairly even give or take about $100-$200 a month. However, there are major benefits to everyone. Your parents can still live in the house relatively cost free since they are getting mortgage payments. The house is out of the estate upon their death.
You and whoever else owns the house now becomes a landlord. This means that you can depreciate the house, deduct repairs, insurance, upkeep costs etc. Moreover, and this is the very cool benefit, you ( and your siblings who own the home) can potentially visit your parents once a year and deduct the trip as a care-taking trip even if it is done at year end. This can be a big deal folks.
Mr. Kevin Walls is the President/CEO of Intelligent Expansion Group, LLC. This marketing organization is