: Transfer value of a mortgaged house My mother and I co-own a house (50/50) that is currently mortgaged. It's an investment property, so we collect rent income on it. We're looking at transferring her interest in the property

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The future earnings from the house are only relevant in as much as it affects what other people might be willing to pay to buy it. If you tried to account for them as well as the current value of the house, you'd be double-counting them, as someone who bought the house would implicitly also be paying for the right to receive those future earnings (or the choice to give up on them and live in the house themselves).

You should just get a fair assessment of the market value of the house, subtract the current balance on the mortgage to get the equity, and divide that in two.

You'll also probably need to refinance the mortgage to remove your mother from it.

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We're looking at transferring her interest in the property to me, for the purpose of cleaning up her assets so she can qualify for Medicaid.

You may not be able to do that do that - there are rules regarding the transfer of assets before qualifying for Medicaid. If this is an investment property then her equity would be considered an asset. Transferring the asset would incur a penalty time during which she would not be eligible for medicaid. If you paid her fair market value, then the cash proceeds would also be an asset that could not be transferred without incurring a penalty.

Now if the proceeds were spent on, say, medical care, then you might be OK, but I would highly recommend talking to an attorney in your state to make sure you don't do something that bites you later.