Statement of Purpose in Graduate School Application First, I hope this isn't the wrong place to put a question like this.

I have a very specific graduate school question. I graduated last spring with my BS and intended to go to graduate school. I accepted an offer from (Big State School). However, during the summer before I could go, one of my parents became terminally ill; so I ended up declining the offer (well after the acceptance deadline) to move back in with my parents and help them out. At the same time, I also arranged it with my undergraduate institution to continue towards my masters there (since I had already acquired a bit of graduate credit) with the intention of transferring to complete my PhD elsewhere.

I am considering mentioning in my statement of purpose the reason why I graduated as an undergrad, have a semester gap, and then started taking graduate classes again at my old institution (I've heard going to grad school at the same place you did your undergrad looks bad?). But I'm also not sure if it's relevant to applications or even the sort of thing that belongs in a statement of purpose.

Would it be in poor form to do this, or should I leave such things out of application materials?

(reposted from MSE)
Yes, you should mention your situation in your statement, briefly and unapologetically.  Omitting any explanation might raise a red flag with admissions committees, and most people will be sympathetic to your family situation.

You might also get back in touch with (Big State School) to see if they would be willing to reactivate your earlier admission.  It's a long shot, but it couldn't hurt.