My father , Still alive, transferred and recorded the transfer of his
real estate to my name, proceeding a serious illness. Now recovered,
he is forced to sell some of the real estate to settle medical bills.
I have given him specific and limited Power of Attorney to close on
the property. All of the selling price of the property is going to
settle a hospital bill, $75,000.00. My question is this; Will I have
to pay gains taxes on this? Is it best to have the cashiers check made
out to the hospitial at closing, to avoid any taxes? Is this legal?

I hesitate to comment on your situation, because you need legal and/or
accounting advice geared toward your specific financial situation and
the laws in your state. As a general matter, though, a gift of
property from a family member to another family member results in the
new owner keeping the tax basis of the person making the gift.
Probably the worst outcome would be for you to sell the property, and
pay tax on any gain, and your father have the medical deduction and no
income to apply it to. Also, the balance of the property transferred
to you would not qualify for a "stepped up basis" at his death. You
might want to consider "quit-claiming" the property back to him, so
that he can sell the portion needed for the expenses, and apply his
expenses against that gain. The balance of the property could be
transferred to you under his will and give you a step-up in basis at
the same time. (And you might want to have him then give you a durable
power of attorney in case he becomes incapacitated again: the opposite
of the arrangement you have now.) There are so many issues involved in
your situation, such as what years the transactions were in, what
special laws might be in your state, what court opinions have affected
those statutes, whether the property is the principal residence of
either party, whether the value of the properties were such that you
triggered any state or federal gift tax, whether he can be claimed as
a dependent on your tax return, whether he has other creditors that
are a factor in your decision, etc., etc., that you should seek
immediate professional advice before closing or signing any contracts.
Sorry I can't be more specific, but I'm trying to avoid giving
specific legal or accounting advice (beyond what you mind find in a
Sunday newspaper real estate column). I don't think having the check
made to a third party will get you off the hook, though, so please
follow through. Good luck.