If they gift the property to you, then your cost basis is whatever they paid for the property plus improvements. If they sell it to you, then your cost basis is what you paid them for the property.
If they sell you the property, they may have to pay capital gains tax. If they gift you the property, technically they would be liable for gift tax for the value of the property less the $14,000 annual exclusion. In practice, since the gift can go against their lifetime gift/estate exclusion, which is now over $5 million, they wouldn't have to pay.
There are Medicaid considerations as well, whether they are currently on Medicaid or you expect them to in the future. This whole area is very messy. It is best you retain a lawyer who specializes in "elder law".
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Today's Featured Article - Harvestin Hay: The Early Years (Part 2) - by Pat Browning. The summer of 1950 was the start of a new era in farming for our family. I was thirteen, and Kathy (my oldest sister) was seven. At this age, I believed tractor farming was the only way, hot stuff -- and given a chance I probably would have used the tractor, Dad's first, a 1936 Model "A" John Deere, to go bring in the cows! And I think Dad was ready for some automation too. And so it was that we acquired a good, used J. I. Case, wire tie hay baler. In addition to a person to drive th
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