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applying for medicaid. part of the home is a rental property.

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Best to seek, confer with an Elder Law Attorney
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SAMACCOUNTING7: This query is best answered by a professional such as a certified public accountant and not a crowd sourced forum.

I did see that you are one. Sine you're posing this question, perhaps you'll need an elder law attorney.
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Medicaid should be able to help you with your question.
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As Dupedwife said:

"You need to seek the advice of an elder law attorney in your state who has experience on the rules and regulations of Medicaid."

I would agree. Every state is different. Federal tax laws change.

It's a maze that requires a professional.

You want to protect yourself. And not have any penalties outstanding down the road that you are financially responsible to pay.
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The entire house is an asset, and should be listed as an asset in any Medicaid application. Duh!
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MargaretMcKen Nov 2023
I think I missed the point, which is probably what counts as a home for future occupancy rights. Sorry!
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My suggestion is as a very first step find her last tax assessor/ collector tax bill to see exactly how the property is viewed by assessor for being able to get a homestead exemption.

if the tax bill is divvied up to be have the parcel / PPIN only partially viewed as able to have the exemption, (like her lower level is) then the other part that isn’t would be - in my understanding of LTC Medicaid rules - an nonexempt asset of hers. It’s not a home but a building that is owner occupied with rental units that are their own asset for her. Nonexempt assets for almost all States is limited to $2,000.00. Two thousand dollars except for CA, IL & NYS as those 3 allow above the 2K. There may be other that do it to, but those 3 for sure are over the 2K. That tax assessor bill will give you and indication of just how over the 2K asset limit the rental % of the structure is. I’d guess she would need to subdivide the property and sell the rental part and then spend down that $ till she’s impoverished enough for LTC Medicaid eligibility.

If the whole property isn’t able to get homestead exemption, I just don’t see Medicaid allowing her to continue to own it, benefit from her ownership and be eligible. Too too too much in assets.

Plus dealing with rental as additional income less property costs each & every month will always be a sticky for Medicaid. Not only the initial filing but for the renewals. Income has max for LTC Medicaid. For most States it’s $2742. There is legit & legal way - via a Miller Trust - that might can be done when individuals are “over-resourced” in income. But Miller is limited to income sources that are “guaranteed income”, like SSA, state and federal retirements & pensions. Rental $ is not “guaranteed income” so she wasn’t ever be able to pull off doing a Miller.

That you are a CPA will help cause if State even allows it, there, imho, more than likely will need to be a super detailed break down on all the rental costs all-in and by for the sq footage of the entire building. I bet caseworker can’t view it as a home but a building. If the caseworker needs it detailed and 3rd party verification as your family, it will be quite a lot of work & $. I bet they will want to see her past IRS filings on its being rental & with filing history & with taxes paid on it . Plus how costs / P&L done too. If she’s been casual on taxes, it will be an issue.

as an aside on this, you do realize that even if she were to get onto LTC Medicaid, that 3 things will happen..
1. she will have to have Almost all her income go as a copay / Share of Cost to the NH every month. All she will ever have as $ will be her States personal needs allowance which avg $50 or $60 a month, so…
2. some in the family will have to pay all property costs. Not just on her home but all property costs as rent is not ever assured. It can be done but someone has to have the wallet to do and pay and report to the State whatever expenses till beyond her grave…
3. …. as the State is required to attempt a recovery of all costs Medicaid paid for her care. Done via MERP. And you a POA or as a heir will have to be able to financially ride this out whatever the time and whatever the co$t$ are on a property that is not in your name. So it runs risk.

Now some folks are 100% good on risk and have the wallet and sense of humor needed for possible years. But most are not. It’s something to think about.
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AlvaDeer Nov 2023
I was so hoping you would show up on this particular question, Igloo.
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If you get the income from the rent, it needs to be declared as income.
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Medicaid is for people with limited income and resources and your LO’s rental on his home might put him above the income guidelines of Medicaid.

You need to seek the advice of an elder law attorney in your state who has experience on the rules and regulations of Medicaid.
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Medicaid may be administered differently in different states, but if I recall correctly, in my state rental property contiguous to the home was an exempt asset up to a certain value and number of units. So, an owner occupied duplex would be an exempt asset.

(I do doubt that reserves would be allowed to accumulate in a fund to pay for repairs.)

The income would be countable.

If your Medicaid worker says differently, consult an appropriate lawyer.
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This is a question for a Medicaid caseworker. Rental property is income. But only the net income. Meaning that taxes and water bill would be taken from the gross amt. Maybe even the cost of wear and tear. Like where I live, painting and re-carpeting have to be done every so many years.
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You list the home, but you also listen rental income under income.
I agree with NYdaughterinlaw that you need expert advice when you are doing this.
Call Medicare and ask for a Medicaid Advisor for your question.
I hope igloo is around and can weigh in on this as she is very savvy regarding medicaid applications, but as long as you follow your qualifications application and answer all question about income and what is owned you should be fine.
Medicaid's interest in the property owned is generally a question regarding clawback in future when any home is sold and there is recovery of money put into the senior's care.
Best of luck. Call a CPA.
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SAMACCOUNTING7 Oct 2023
I am a CPA lol
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This is a question to be answered by an accountant, not an online forum for caregivers.
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