I was formerly a resident of California (before 2019). I still have family there. Now I was considering purchasing a home in California, that my mother would live in. My mother is almost 70 and derives her income from a combination of work and Social Security (I’m not sure if she receives SSI and SSA).
I understand if I end up renting the home or eventually sell it, I will have to pay taxes on it, both in California and at the Federal level.
Are there any other tax implications of owning a home in California, despite being a nonresident. I’ve researched California’s definition of residency and I know it’s very odd. I’m pretty certain there is no way California could define me as a resident or even part year resident. While I make a few trips back each year, it’s never more than a few days at a time and would never total more than four weeks in a year.
While I would like my mom to live in the home rent-free, it’s my understanding that could cause her to forgo some SSI benefits (https://www.ssa.gov/ssi/text-living-ussi.htm), but not SSA benefits. If she is receiving SSI, the max benefit she would lose is ~$264. Is my basic understanding of that correct? Like I said above, I actually don’t know if she’s receiving SSI. This is more of a hypothetical.
Would there be any advantage to renting the property to her at the bare minimum rate? My understanding, if this was a rental property, I could write off improvements or repairs. Further, I believe if I have losses on the property, while it is a rental, I could have it offset the capital gains when I sell the property (if there is capital gains). Is my understanding correct?
I’m curious what other people may have done in similar situations? What’s the best way to purchase a home for an aging, low-income, parent?