If you own a home in NYC and you are over 60, this could save your kids the entire family house. This video covers a critical estate planning window involving Community Medicaid look back rules and how transferring your home now could protect it from Medicaid recovery later.
Watch on YouTube: https://youtube.com/shorts/GELiWvRg81c
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What This Means for Staten Island Homeowners
If you bought your house decades ago and held on through every NYC market cycle, you are sitting on serious equity right now. Staten Island’s median home price is hovering around $760K in May 2026, and most homeowners over 60 in neighborhoods like Tottenville, Annadale, Eltingville, and Westerleigh have basis numbers from the 80s and 90s — meaning a sale today produces enormous taxable gain unless you plan it correctly.
The Section 121 Window That Closes When You Move
The IRS Section 121 capital gains exclusion lets a married couple shield up to $500,000 of gain on the sale of a primary residence (single filers $250,000) — but only if the home is your primary residence for at least 2 of the last 5 years. The minute you move out and start renting, downsize into a relative’s home, or transition to assisted living, that 5-year clock starts ticking. Wait too long, and the exclusion disappears. We see this every month with Staten Island sellers who waited until they had to move and lost six figures of tax-free gain to the IRS.
Stepped-Up Basis vs. Selling Now: The Trade-Off
The other option some homeowners weigh is leaving the house to children, who get a stepped-up basis at inheritance — wiping out the gain entirely. But that comes with its own costs: probate timelines, family disagreements, deferred maintenance, and property tax exposure during the transition. For most Staten Island homeowners with grown kids who don’t want the house, selling while you can still claim Section 121 produces more cash for retirement, more flexibility, and less family friction. Here’s the full math on Section 121.
What to Actually Do
Run your number first. Use the Downsizing Equity Calculator to model your net proceeds after closing costs, transfer taxes, and capital gains. Then talk to a CPA about whether to time the sale this year vs. next, and a real estate agent about pricing strategy in your specific micro-market. The window matters — and on Staten Island, the buyer pool for clean, well-maintained 60+ year-old homes is strongest in spring and fall.
Need help thinking through the timing? Reach out — we’ll walk you through what your house is worth today, what it would net after taxes, and whether selling now or holding makes more sense for your family.
