Profits from the sale of my mother's home were gifted to me per her attorney. How does this affect me at tax time?

This is about as fishy sounding as I ever heard, so I an have zero idea of what happened here, but it does sound as though this is a massive, possibly fraudulent attempt to hide Mom's assets so she can go on Medicaid. As you understand that means we, the taxpayers are paying instead of Mom's assets. I can't even begin to fathom what happened here, but I think, given you ALSO don't understand what is happening (given your asking us) you need to ask ANOTHER attorney who may be able to explain it, and if this is an attempt to hide Mom's assets so she can "go on the dole" I suggest you find a way to undo what is if not legally, then possibly morally unwise.

How much of a " gift" did the attorney collect to give you yours ? It sounds like the attorney was trying to hide the money from being paid to the nursing home to defraud Medicaid and also mislead you so he could also profit. Until the profit from the sale of the house is spent down again to Medicaid asset level for her NH care ,nobody can legally receive it as a gift. Get yourself a legitimate attorney You have a lot of legal questions not appropriate for this forum to offer advice on.

"Her attorney gifted the profits to me for her care after the sell."

To me this says that the attorney did not actually gift you anything to be used for your purposes. It says that the attorney entrusted you to care for mom's money to take care of her needs. Is that correct?

Just a thought. Was this attorney handling the sale of the house? Did he give a reason why he felt gifting was a good thing? Because if Mom was alive it was her money and should have been placed in her account and used to pay the NH. If she died before the sale, then again, its put in an acct stating its the estate of. Depending on the amount of money, her estate may have needed to be probated. If a Will, all debts need to be paid and Medicaid is a debt. If no Will, then the State gets involved and Medicaid still would need to be paid then any money left the State decides who inherits.

What a tangle web we weave...

If Mom was in a NH at time of the sale of her house, the proceeds should have been used to pay for her care. Medicaid would stop and the money used for her care spent down. Once spent down, you apply for Medicaid again. You must not have had a Medicaid lawyer or he would have known the rules.

This money should never have been gifted, that can't even happen in the 5 yr look back. It will cause penalties. The reason Medicaid wanted it sold was so the proceeds would go towards Moms care. I would say at time of recovery, they will want to place a lien on the house and there is no house. So they will question where the proceeds went and may ask for you to pay them back.

You need an elder lawyer at this point well versed in Medicaid. I have no idea why a lawyer felt Moms money was a gift to you unless she had passed. If she had passed when the house was sold, thats a whole other thing that I won't get into now. But if she was living, that money was hers to use for her care.

You cannot file separately unless you file exactly the same way is my understanding. In other words, if you file straight no deductions, he has to file straight no deductions. If u file with deductions he has to too. But this and whether u pay taxes on the gift is for a CPA tax preparer. When I divorced, the last year we were married legally, I am sure we filed as married.

If Mom is already on Medicaid, the Proceeds should be paying for her care. Not gifted to you.

You don't say what state you're in, or how much the gift was. There's no way you should be asking this question to anyone except a local professional who knows the Medicaid rules in your state. If you were gifted a "large profit" then you can afford to hire someone who can give you accurate guidance. Also, parts of your story don't add up...

Get a law firm that has attorneys that specialize in family law, real estate law and elder law. The gifting of home sale proceeds is going to be a problem for Medicaid. Mom, by law, cannot gift assets as it would make her ineligible for Medicaid in MOST cases..

Did you live with and care for mom? Your disability is likely to have an impact on Medicaid laws. There are specific exemptions that apply to disabled children of the elderly who need facility care.

Please explain "gifted per her attorney". We're the proceeds deposited to some sort of trust that you didn't know about?

I'd hire a new elder law attorney, and a good CPA, what has transpired has many undertones of being illegal and if your mother ever needs Medicaid in the next 5 years, you and her both could be in deep doo, doo.

The funds in any case must be in her name and used ONLY for her care, not to pay your bills.

Since you mention Medicaid, it sounds like she is already on Medicaid, if so, you need to get this straightened out now as she should be self pay due to selling her home and have adequate funds to do so.

Medicaid and the government are not easy on people who try and beat the system.

Time to be proactive and seek professional help. Good Luck!

Why would Medicaid request that you sell moms house then come after you for the money? Is it being used to pay the nursing home for her care? Maybe I'm not understanding something 🤔

So, she sold her house and gave you a lot of money. Yes; that is going to be a problem if she needs Medicaid within the next five years (maybe less in some states). I’ll assume you were not on the title of her home.

Gifts are not taxable to the recipient; however, if you are being compensated for care, that would be taxable income (but fine with Medicaid with appropriate documentation, just not as a lump sum).

Please tell us that you put this money in an account in only your name rather than a joint account. Your divorce lawyer will discuss the ramifications with you if you shared the money with your soon to be ex-spouse.

Consult an elder law, Medicaid lawyer on the gifting vs payment problem.

Edited to add;
She will need to file a gift tax return, but almost certainly owe no tax, for the year of the gift.

If your attorney directed this, they need to help you.

A lot will hinge on Medicaid Estate Recovery in her state. How could the attorney decide to gift you the proceeds. It would be more logical for it to have been made part of her estate proceeds.

I have no idea but bumping your question up so others will see it to supply answers. Please stick around.

Wishing you all the best.