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My Mom has Medium Dementia/Memory Loss, she has a small amount of savings, once the savings is used-up and the IRA money is used, does she still have to pay taxes on it? My name is on the Home title with her name, after the IRA runs out, will the state (NM) force me to sell my House to pay for her care before Medicaid kicks in?

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Terrim appears to be correct, except the following phrase frightens me: " You can't sell it (the house) , as they would charge her with trying to dispose of property in order to get government benefits..." Last time I looked this is still The United States of America. One can sell one's real or personal property without regard to interference by the government. ...as long as you do not want anything FROM the government. Is Medicaid worth this? You tell me. I know the Look-Back Policy. It's five years, right? Regarding the sale of your mother's home : Why not sell it during her lifetime? Like now.
Change title, ownership. Knowing that we are ALL going to die, sometime..I often wonder why everyone doesn't do this. ?? I am open to suggestions.

IRA withdrawals create a 1099-R. They'll sent it to you in January. Enter the amount on Line 16A. Carry over the taxable amount on Line 16 B. Software will do the calculations.
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She will pay income tax on IRA withdrawals. You just file an income tax form for her. Form 1040. With her name on the house too, she might not even get Medicaid depending on the value of the house and you can't sell it as they would charge her with trying to dispose of property in order to get government benefits. After her death, you will have to sell the house and Medicaid will get half of it to repay what they had to pay out for her.
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What kind of IRA is it? If it is a Roth IRA then no taxes are due if she is over 59 1/2 (I'm assuming she is past this). With both names being on the deed of the house you will continue to pay taxes on it. You keep a house when Medicaid is involved assuming she is still going to be living in it. Each state has their own regulations, so ask your state Medicaid program what they expect.
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First of all, you need to know if the IRA is a traditional one or a Roth IRA. If it a Roth, the withdrawals are tax free. If it is a traditional IRA, the withdrawals are taxed as ordinary income. Depending on how much is withddrawn, and the amount of any other taxable income she has, part or all of her Social Security income may become taxable.

However, the tax effect will be lessened because at least part of her expenses at the assisted living facility will be deductable as a medical expense. She will need to itemize her deductions to take advantage of this.

In my area there are volunteers who provide tax filing help to seniors during tax season. Maybe you can find someone to help you at least the first year.
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Well, when I had to dip into mother's savings, I opted to pay the taxes out of the withdrawal. The first year that I used the investments, I realized the tax bill was HUGE. it was much easier to deal with the taxes bit by bit.
BTW, are your monies placed in a trust? that would be the deciding factor in the house situation.
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