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I have been advised to separate out expenses for myself and mom who lives with me. This is for clarity sake (and maybe taxes) so I am beginning with the two rooms she has, one the master bedroom (I gave her the master-which is not huge-so she can have her own bathroom) and a sitting room (bedroom size). I am seeing references to fair rent but I don't think that is the commercial rent value?
Any experience or knowledge of how to determine the number would be appreciated.

As others suggested, while contemplating/calculating what might be a fair amount, it would be good to run this by EC atty. What you end up deeming fair may exceed what Medicaid would deem fair - best to avoid issues, in case she ever needs that service. Contracts done up legally, signed and witnessed will be useful if she ever needs Medicaid. Keep receipts!

Others mentioned utils and others still care-giving. These all fall under different categories, so again, once you think you have it worked out, review with EC atty.

Utils should be easy to work out, if you have lived there a while, have the old bills and no changes to the number of people before mom moves in. Monthly these will vary a bit, so it's best to compare a year's worth (colder/darker in winter, so more heat and electric, more laundry/dryer, more cleaning, bathing, etc.) It will take a while to know the real impact, but comparing cost each month before and after mom moves in, you can get a rough idea how much she impacts the bills - it isn't likely going to be doubled, unless she jacks up the heat, runs elec things all day, and takes 2 hour showers!)

For something like cable, you likely already have it. If there is an extra charge to set up her own tv or special programs in the sitting room, then she should cover that. Otherwise, if there's no change in the cost, I wouldn't charge anything for that.

I also don't think splitting the mtg by # of people is very fair. She can use other parts of the house, say the kitchen, but she is never going to own any of it and likely doesn't use the rest. Keep the "rent" reasonable, more like enough to cover clean up and damages after she's gone. Also, MTG or rent isn't going to increase if she moves in, so she isn't increasing your outlay...

Food/household supplies might be similar to utils. If you on average spent $100/week on food, etc and now it's $200, maybe it's all hers? If you are combining meals, try to make it fair for her - she likely won't eat as much as your son! If she has special foods/needs, use her money (best to use her CC or check, or debit, so you can have proof) to buy these separately from the regular household food/supplies and keep receipts.

Care-giving is a whole topic in itself. The IRS has rules about this and if you make over a given $ amount for the year (the limit is ridiculously low!), you have to claim it as income, pay all the taxes, SS, Medicare AND have an agreement.

Unless I was desperate for money, or having my mother increased my mtg or rent (generally unless you buy/rent more space, having her live there doesn't change the amount being paid, it just eliminates some space you were previously using, and you will get it back!), I likely wouldn't charge her rent, but that's just me. Maybe a refundable deposit, like apts have, just in case she has accidents, etc., to cover repairs after the fact. Whatever increase in utils occurred, it would be nice to have her cover that amt - it's easy enough to figure out how much more these cost by comparing the last year's bills to current after mom moves in, but it will be a ball park and maybe need to be averaged so the payments are consistent or just have the old bills on hand each month and charge the diff in the new bill (save your old bills with the new ones, for proof!) As noted, cable wouldn't likely increase, but if it did, that would be her share. Food - same idea as utils, if you combine all food/supplies, she covers the increase over previous monthly costs. If she has special items needed, use her own CC, debit, checks to buy these separately and keep the receipts! The only other issue is care-giving. She may only need a little assistance now, so is it worth all the hassle to charge for it? But, over time that can increase, so it would be good to have a plan, a sliding care-cost, with more payment for more services. I wouldn't have a clue how to draft that doc, I would rely on someone who can draw up a plan and charges for each task.
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Reply to disgustedtoo
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You could utilize the formula your county uses to calculate SSDI contribution to SNF monthly rent. In our state it's all of the SSDi excluding $50 for incidentals. Which places the average at $900/ month.
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Reply to Screennamed
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My elder attorney advised that I have a realtor come in and assess the space she uses. He did and then he provided a letter to me what he felt was the fair market value for her rent plus including her utilities and use of the rest of the house. She has a BR, sitting room, bath and use of the rest of the house and the porch. This would be documentation in the event she would have to apply for medicaid.
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Reply to evander09
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Use whatever formula your parents charged you for rent when you lived at home.
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Reply to GardenArtist
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disgustedtoo Sep 19, 2020
For me, that would be 0%, as it would likely be for many.
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Imho, total square footage of home ÷ her living space/square footage with regard to the mortgage or rent payment.
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Reply to Llamalover47
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Consider splitting the utility bills in half - or by number of people living in the home - and same for mortgage.
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Reply to Taarna
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Talk to an elderly law center to make sure you do everything properly. When my friend had to go into a nursing home Medicaid went back and demanded proof of every single payment to family, including reimbursements for items and services the family initially paid. As her power of attorney it was an absolute nightmare, and many of the expenses were disallowed by Medicaid because we did not have adequate proof. I did the best I could, but so much was denied.

The elderly law center can help you create an agreement that is acceptable to Medicaid. There are so many "ifs" "ands" and "buts" that it is really a necessity.

If you cannot locate an elderly law center either on its own or through an elderly assistance program in your area, you might want to hire an attorney.

Also, having an agreement on paper that has been checked for fairness by a 'legal eagle' may help in the long run with family members who may think since you were receiving money all along, you were not being fair. It might not sound important now, but please do what you can to protect yourself!!
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Reply to anrean
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You could divide the rooms into the rent and charge that amount, plus Utilities. Cable, Food
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Reply to bevthegreat
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My mom is in Assisted Living and pays $2,000 for room & board and $590 for personal care (help with dressing, bathing, medications, etc). 30% of income to a senior needing care is not relevant. My mom pays almost 100% of her income on her facility. Check into assisted living or Independant living rates in your area and what your mom can afford and adjust accordingly. I would document your thought process for any government aid she may get now or in the future. I assume you are also providing board and care, not just the two rooms plus bath.
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Reply to NancyR
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Here is an AgingCare link to the agreement JoAnn29 is talking about. A sample form link can be found at the end of the article. https://www.agingcare.com/articles/personal-care-agreements-compensate-family-caregivers-181562.htm

The paragraph regarding rent is at the top of page 3. This form is good reference for taxes and possible future Medicaid look-back purposes.
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Reply to RoxineM
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Fair rent for IRS purposes would be whatever she would have to pay on her own in a similar town with similar square footage and services. It has nothing to do with your mortgage payments.
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Reply to careinhome
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FloridaDD Sep 9, 2020
Yes and no.  There are two ways to handle this.

1.  Rental arrangement - FMV of rent (recipient has to pick up income, but can depreciate property)

2.  Roommate arrangement (Mom pays an appropriate % of expenses) -- in which case mortgage is relevant.   Owner does not pick up income, but does not get to depreciate property.

IRS will accept either one.   In my case, they were about the same.
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If your son is over 18, charge her the same rent you are charging your son in the basement.
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Reply to Sendhelp
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FloridaDD Sep 9, 2020
Why?   OP is under no requirement to charge her son rent, and the basement room may not be equivalent to mom's two rooms.
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Margaret, I forgot about mortgage interest.

Yes, if u have a Mortgage for 30 years, the first 15 or 20 is mostly interest. Very little principle. An Amortization schedule will show u all 30 yrs and what is interest and what is principle.
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Reply to JoAnn29
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This is a bit more tricky than the last post suggests, because mortgage payments normally include a repayment of capital borrowed, as well as interest. (Some mortgages are interest only, but it’s rare). Mother shouldn’t be paying the capital component. On the other hand, she should be paying a proportionate share of rates, power, water, cleaning and any other costs associated with running the house. Of course she should be paying a share of food, groceries and all the other day-to-day costs. She should also be paying for the care component of labor, whether it is for washing, cooking, gardening, or even just companion issues. You are going to make a stab in the dark on all of this. It’s too difficult to quantify precisely.

PS: 30% of income is a common gauge of 'affordable rent' for people on low incomes. Rent would normally cover rates and perhaps water, but the other costs listed above would be extra to an 'affordable rent'.
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Reply to MargaretMcKen
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LS2234 had a good suggestion; you could actually be more specific by using the square footage of her rooms as a percentage of the square footage of the whole house, excluding the common areas like kitchen and bathroom.
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Reply to GardenArtist
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Thank you all for your suggestions. I have a bedroom. Mom has 2 bedrooms one of which is her "living room" - a transplant of her living room furniture prior. And my son has a room in the basement.
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Reply to momzac
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A NJian! Hi! I live in the SW of the State.

Keeping accts separate is good too if you ever need Medicaid. I suggest you write up an agreement and have u and Mom sign it in front of a notary for Medicaid lookback.

Rent would depend on what Mom brings in. HUD usually charges 30% of a persons income for rent. Utilities are something to consider. So if Mom brings in 1000 a month, then $300 to $350 would be her rent and you could add her portion of utilities to that. Mom should have enough left to buy her personal items and special foods u don't eat. Pay her copays , her credit cards, etc. You should not have to pay for anything.
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Reply to JoAnn29
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The Take your monthly rental or mortgage payment and divide by total number of actual rooms( kitch + bath do not count) So if it is a 3 bd with a living room then 4 rooms. She would pay for 2 rooms.
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Reply to LS2234
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How many live in the home?
How many bedrooms are there?
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Reply to Sendhelp
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