2 Answers

go to www.irs.gov for tax info

Facts: Life estate to your parents;  the deed is in your name.

You are the rightful "long term" owner and not your parents.  You somehow granted them the right to your property as long as they both lived, hence the term Life Estate.  One they both pass, the property reverts back to you.  If you predecease your parents, then, upon their eventual deaths, the property reverts back to YOUR heirs.

To answer your question, the cost basis to the subject property was probably established when you first became the owner.  I said "probably" because I am not sure how the property was received at that time.  You never deeded your property to them.  You merely gave them a right to enjoy it as long as they both lived.  Sure, they would be paying for things such as maintenance and real property tax and all.

My guess is: No, simply because the house was not sold by you.  The issue here is what is the cost basis or how it is determined.  Capital Gains occur when a property is sold.

A visit to your accountant should clarify all this for you.    Good luck.