My mother lives in Wisconsin. She owns two homes free and clear. A sibling would like to purchase one, possibly both. Another sibling feels it is too late bc of her age and the possibility that she may need long term care in the future. We are in agreement to sell. I feel it should be at a reduced rate. Others say it should be no less than FMV.
The other house would probably be considered "investment property", thus no tax reduction. Full Capital Gain taxes would need to be paid. A CPA would be needed to untangle investment property taxes.
As others have posted, your Mom would need to sell at Far Market Value. Hire a licensed Appraiser for this situation. A Realtor could give you a ballpark figure, but an Appraiser uses different methods to arrive at his/her figures. I hired an Appraiser when it was time to sell my Dad's house as his house hadn't been updated since the 1980's [which doesn't sound that far back but actually was 35 some years ago].
I agree that an attorney and a CPA need to be involved, because Mom is going to have to pay taxes on the proceeds of those sales, and that may not be in her best interests. If she does decide to sell, she needs to have that money put into a trust for her care.
Under no circumstances should the houses be sold for less than fair market value, because that's taking advantage of her. It sounds like the one sibling who says she may need long-term care is the one who's looking out for her best interests.
So NO to a bargain. She can sell to whomever she likes whenever she likes for FAIR MARKET VALUE. Have property assessed; list needed repairs, buy for low fair market minus the repairs. Keep meticulous records for her. Then these proceeds are her assets. She can use these assets for care in her own home, care in Assisted Living or however else she likes to spend it for her own life and her own care; she must NOT gift this money to ANYONE EVER. She can make a will to leave it after her own death.
My mother's NH rate was a bit over $10k per month and that was several years ago.
If there is the remotest possibility that mom will require Medicaid, you need to get an Eldercare attorney involved (as MidKid wisely points out) so there are no surprises down the road
Doing this on your own will almost certainly cause issues in the family. Being as open and transparent about ALL your dealings, I imagine there is a way to do this. All money from the proceeds should go right to mom for her care, first.
I wouldn't take a step w/o legal representation. And you ALL need to be in 100% agreement about the selling price.