@Sandyjb555
Since this is all short term gains and you don’t qualify for the exclusion for it being your main residence, it doesn’t really matter. If you paid $86,000 and sold for $447,000, and it happened in the same tax year, then you’re going to report $361,000 of taxable short term gains. It won’t really matter how you divide the cost basis because the tax will be the same either way.
Separately, I’m not sure Medicaid would be entirely happy with you buying the property so far below market rates. Hopefully your estate planner knew what they were doing.
