Tax planning for the Silent Generation’s home and health

The Silent Generation generally includes taxpayers born from 1928-1945. In 2025, many of these clients are 80-97 years old. They grew up in times of caution and resilience, and many still prefer simple, conservative financial choices.

Consider a typical client: an 85-year-old widower who has lived in the same home for decades, relies on Social Security income along with a modest pension and is beginning to need help with daily activities. As needs change, the tax questions usually cluster around three areas: selling the home, paying for care and transitioning property to family. This is where you, as their tax professional, can add real value and open new advisory opportunities.

Selling a longtime home

Many Silent Generation clients live in homes purchased decades ago, often with no remaining mortgage balances. Selling these homes can trigger significant capital gains. Fortunately, if the taxpayer meets certain criteria, §121 allows for an income exclusion for up to $250,000 of gain ($500,000 for married taxpayers filing jointly) if the home has been their primary residence for at least two of the past five years. There are other criteria to meet; see Publication 523, Selling Your Home, for further details.
Some key points to remember:

• Short absences and even time spent in a licensed nursing facility don't disqualify a client, provided they lived in the home for at least one year in the past five years.
• Improvements that add value, extend useful life or adapt the home (for example, a stair lift or bathroom conversion) increase basis, which may reduce taxable gain.
• Clients who rented out the home at any point before the sale may face depreciation recapture, which is not excludable.

Your role: Help clients collect improvement records, establish an accurate basis and confirm they meet the §121 requirements. Doing so may save them substantial tax money.

Planning for long-term care

Declining health is a common concern for the elderly. Some Silent Generation clients will pay for in-home care using long-term care (LTC) insurance, while others may move into assisted living or nursing homes.

Here's what to watch for:

• Qualified LTC insurance reimbursements are generally tax-free, while per diem payments are capped at $420 per day in 2025 ($430 in 2026).
• Family members often want to provide care. However, client payments to relatives are not considered tax-deductible medical expenses unless the caregiver is a licensed professional.
• Premiums for qualified LTC insurance may be deductible medical expenses, depending on age and adjusted gross income limits.

Your role: Review clients’ LTC policy details, explain per diem payment limits and reimbursement methods for tax purposes, and help families understand why informal caregiver arrangements may not qualify for tax benefits.

Transitioning property with a life estate

Some Silent Generation clients prefer to remain in their homes but want to begin transitioning ownership to their children, often for estate or long-term care planning reasons. A trust can also be part of this strategy, as it can help manage assets and avoid probate, alongside the use of a life estate. A life estate deed allows the parent to retain the right to live in or receive income from the property for life, with the remainder interest passing directly to heirs at death.

Benefits include avoiding probate and ensuring heirs receive a stepped-up basis when they fully inherit the home. Pitfalls include irrevocability of the transfer, potential gift tax reporting and Medicaid eligibility complications.

Your role: Help families weigh the pros and cons of a lief estate arrangement, model potential tax consequences of a sale before the end of life and connect them with legal counsel when needed.

Other tax considerations for clients in their 80s and 90s

In addition to housing and care, practitioners should watch for these Silent Generation touchpoints:

• Required minimum distributions (RMDs): Even modest IRAs require careful planning. IRA qualified charitable distributions (QCDs) may reduce taxable income while supporting causes that clients value.
• Social Security income taxation: After benefits begin, ongoing planning may be needed to manage taxable income.
• Family caregiver tax breaks: Adult children supporting a parent may qualify for head of household filing status, the credit for other dependents or, in some cases, a medical expense deduction if they itemize and the parent qualifies as a dependent.
• Estate planning basics: Encourage clients to update their wills, powers of attorney and beneficiary designations to prevent any complications.

Advisory value for the Silent Generation

For small firms, Silent Generation clients offer a unique advisory niche. By addressing home sales, LTC costs and property transfers, you can position yourself as the trusted advisor who guides families through some of life's most complex financial decisions.

Action steps you can take:

1. Ask questions proactively. Don't wait until a sale or move happens.
2. Encourage documentation. Improvements, medical expenses and LTC policies should all be tracked.
3. Educate families. Adult children are often closely involved and benefit from clear guidance alongside their parents.
4. Build a niche. Market your services as those specializing in tax planning for aging clients.

The takeaway for serving aging clients and their families

Silent Generation clients are often facing pivotal moments: deciding whether to sell, stay or pass along their homes, all while balancing health care and financial stability scenarios. These situations are prime opportunities for practitioners to add value, protect client wealth and strengthen multi-generational relationships.

This blog introduces common tax issues facing clients in their 80s and 90s. NATP members can take a deeper dive in the companion TAXPRO CPE article, The Silent Generation, which walks through the sell, stay or transition decisions with real-world scenarios and the related tax implications.