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My mom moved in with me and my family 4yrs ago. She sold her house with a reverse mortgage on it, made a profit of $15k. We paid her credit card bills and used some of the funds to buy her things for her room in our home. She was diagnosed with AD 3yrs ago. She gets $1,600 from ssi and $250 from a 401k. She pays us $200 weekly for room and board. It includes everything, food, personal care, rx management and transportation. The rest of her monthly income goes towards health ins premiums, healthcare policies and credit card payments. She also pays for her rx and personal care items. I am POA. We do not claim the room & board and she doesnt either. She has on average $1,500 in her checking account and no savings We live in MA.

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Thank you akdaughter. Your explanation is basically how the cpa (and I forgot a conversation I had with an attorney we used to close on her condo confirmed the same in casual conversation).
I would be curious to know what is considered 'care' as I do help her shower, cut her nails, do her hair and make her meals. When she needs more care than this I will use her insurance policy to have a caregiver come in to our home. She has 2 policies of $36k each that will pay $350 weekly so I either have 4 years of care or 2years, if I use them simultaneously. Isn't it so sad, We are taking a burden off the government by saving them a medicare payment to a skilled nursing facility.
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It is my understanding that a small payment like yours is considered "sharing expenses" and therefore not taxable to you. If you were to calculate your mom's share of groceries, utilities, cable TV, house taxes and insurance, use of car, etc, it would likely exceed the $200 per week that she is paying. Since these things are not deductible on your taxes (with the possible exception of the house taxes), the share that mom pays for these things is not income to you. If she were paying you to care for her, that money would be income and therefore taxable.
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Thank you for responding pamstegma. I do have a contract that states the amount she pays is for room & board. we both signed the contract prior to her being diagnosed with AD. I ran this by a cpa but not an attorney. The cpa told me that a room & board agreement is different than rent because it includes her meals and other care which is all spelled out in the contract. I can't see how her paying for a place to live that provides meals and personal care would be viewed a 'personal gain' by me as POA. The cpa also said I do not have to claim room & board because she is a family member. All along I have viewed our arraingement to be within legal standards regarding tax filings.
I will set up an appointment with an attorney to make sure I have not created a problem for myself... ugh
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It will cause a problem with Medicaid unless you have a written contract from her and you have declared the rental income on your taxes. Without those two things in place, Medicaid will impose a gift penalty.
The other problem is that a POA is not allowed to write checks to themselves or use the POA for any personal gain. See your attorney and get it straightened out, do the legal paperwork.
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