<prompt> Human: They claim its because they dont want to pay the higher taxes and they want to give their money away now, rather than have the government and nursing homes take all of it. They live off of a good pension and social security, but it wont be enough to pay for full care when they need it.First, wouldnt they pay the lower capital gains tax? Arent they just shifting the tax to us, or are gifts under a certain amount not taxed it wont be that much when divided? If gifts are taxed, are they considered income? We make more than they do, for us that amount would fall into a higher bracket then it would for them so wouldnt we pay the higher tax than they would on that same amount?Second, we realize that we are probably going to have to pay for a nursing home eventually anyway and we rather they use this money to buy long term care insurance while they can still qualify for a decent rate.How else can we convince them that keeping the money and investing it will be a better gift to all of us in the long run.Just so the tax issue is off the table at least. Could they open an IRA that would allow them to deposit the proceeds as makeup contributions? Can they do makeup contributions to IRAs. How do HSAs work with Medicare, is that an option too is there a yearly cap? Neither of them have a 401k both have pensions.EDIT: Wow, some of you are so skeptical. They sold the house to move somewhere cheaper, nicer and more conducive to their hobbies and interests. They made a small gain from the sale and they want to give as much to their kids as they can before its gone. Theyre not eligible or even considering Medicaid.The tax question has been answered. Thank you ubbob_robb and upooh_bear for explaining. I didnt mean to come off so anti-taxes. We dont mind paying taxes, but who wants to pay extra if they can help it? It just didnt make sense that they could gift it and no one would have to pay any taxes, or that they would pay higher taxes if they kept it. We were unaware of the look back period for Medicaid and well let them know that is something to consider if they ever were to need it, but again we doubt they would qualify.Some of you brought up long term care insurance. Youll note I already mentioned that in the post. At least one if not both of them should be eligible. We would rather they keep the money and use it to pay those premiums. If they do end up going into care at some point, it seems like the kids would get more financial benefit from that insurance than from the upfront gift.In the end we rather they keep the money and plan for their own future security, but we also recognize that they are trying to do something nice for us. Its their money to do with as they please but we would like to help them think long term about this decision.  <response>: If its their primary residence and they satisfy ownership and use requirements, they can exclude up to 500k of gain from sale from their income.How much gain are they expecting from the sale? 