I
I.Smoak
Guest
- Jurisdiction
- Colorado
Hello, I'm not sure where to begin so I will briefly describe our idea and then provide a list of questions that are concerning us: My wife and I and two children (one baby and one 6y/o with shared custody from previous relationship) are hoping to purchase my parents home. Here's the catch... We are first-time buyers with up-and-coming credit and very little in assets. My parents are in their 60's though my mother is disabled with MS and will soon be leaving her current employment. While my father has Type I diabetes, he is still able to work - though he makes very little and they are barely squeaking by. As my wife and I are looking at the mutual benefits of: taking care of my parents, their assistance with care of the children, providing our children with a proper yard and neighborhood, and reducing the monthly overhead for my parents.
Some notes: My wife is not currently working, nor do we plan on this in the near future. We are currently covered (though not necessarily by choice) by Medicaid due to my income (~$55k/yr) and family size. My mother is working up to the point that she can receive the maximum SSD benefit. They are covered through my father's insurance at work - were it not for that insurance, they would be paying nearly $10,000/mo on medications alone! They are currently paying off some remaining IRS debt from years of back-taxes on their own business (which technically is still open, though it is not a significant source of income). Their small home is rapidly unable to accommodate my mother's deteriorating mobility and currently has JUST enough room to house my family as well. The property value is around $340k in the current market and they owe approximately $72k in principal. I will be discussing the selling price with them based on anticipated improvements, leaving them a large sum for them to live on and enough equity to install additional rooms and renovate the main level for easy access in a wheelchair. I will be having a contractor look at the home to estimate the cost of these improvements.
I am ABSOLUTELY keeping our finances separate from my parent's. I will be covering the mortgage and our usual bills and they will mind their's as well (phones, insurance, etc.) I am considering splitting the cost of utilities - probably with them paying through me.
Looming concerns:
-Will we be able to remain on medicaid? I am unlikely to be able to afford private insurance in addition to our regular bills and consumables - we are extremely careful and quite thrifty; not spending much (<10% on expendable items)
-Is it possible that my parent's debt could come to haunt me in regards to the property or other assets?
-Assuming that total household income will be around $75k/yr and a total occupancy of 6, what will happen with my taxes? Will I incur more? Are there exemptions or other credits for assisting care of my disabled mother, or down the road father as well?
I know I have more questions... I just need someone to talk to who, hopefully, can even offer more advise than I am looking for!
Some notes: My wife is not currently working, nor do we plan on this in the near future. We are currently covered (though not necessarily by choice) by Medicaid due to my income (~$55k/yr) and family size. My mother is working up to the point that she can receive the maximum SSD benefit. They are covered through my father's insurance at work - were it not for that insurance, they would be paying nearly $10,000/mo on medications alone! They are currently paying off some remaining IRS debt from years of back-taxes on their own business (which technically is still open, though it is not a significant source of income). Their small home is rapidly unable to accommodate my mother's deteriorating mobility and currently has JUST enough room to house my family as well. The property value is around $340k in the current market and they owe approximately $72k in principal. I will be discussing the selling price with them based on anticipated improvements, leaving them a large sum for them to live on and enough equity to install additional rooms and renovate the main level for easy access in a wheelchair. I will be having a contractor look at the home to estimate the cost of these improvements.
I am ABSOLUTELY keeping our finances separate from my parent's. I will be covering the mortgage and our usual bills and they will mind their's as well (phones, insurance, etc.) I am considering splitting the cost of utilities - probably with them paying through me.
Looming concerns:
-Will we be able to remain on medicaid? I am unlikely to be able to afford private insurance in addition to our regular bills and consumables - we are extremely careful and quite thrifty; not spending much (<10% on expendable items)
-Is it possible that my parent's debt could come to haunt me in regards to the property or other assets?
-Assuming that total household income will be around $75k/yr and a total occupancy of 6, what will happen with my taxes? Will I incur more? Are there exemptions or other credits for assisting care of my disabled mother, or down the road father as well?
I know I have more questions... I just need someone to talk to who, hopefully, can even offer more advise than I am looking for!