Home Add to Favorite Contact Submit  
             23 May, 2022

Category:  Articles » Home Management » Elder Care


Doesn't Medicaid Exempt $12,000 per Year Gifts?

         Views: 2228
2007-02-07 22:11:47     
Article by Gabriel Heiser

Many people are aware that there is some exemption for gifts, but the details are a little hazy. Usually it goes something like this, "I thought there was a $10,000 per person exemption for gifts, so there would not be a Medicaid penalty. No?"

First of all, the client is confusing a gift tax exclusion with a Medicaid gift exclusion.

Under federal gift tax rules, a "taxable" gift is made whenever one person makes gifts to another person of money or equivalent that exceed a total of (currently) $12,000 per year. (For many years this figure was pegged at $10,000, hence the confusion; now the exemption increases every few years to reflect inflation.) So making two gifts of $7,000 to the same person within the same calendar year will push you over the limit. But making one gift of $7,000 on December 31 and another the next day on January 1 does not push you over the limit, since the second gift is in the next calendar year. The "clock" is reset to zero every January 1, so to speak.

So what difference does it make if the gift is a "taxable" gift? It only matters if a person's lifetime taxable gifts will eventually exceed $1,000,000! And no client who is even thinking about applying for Medicaid is going to have that kind of dough. So as a practical matter it only means that there is an obligation to file a federal gift tax return if your gifts to one person in a calendar year exceed $12,000.

If you are married and one spouse makes a gift of, say, $20,000, to one person, by filing the federal gift tax return the couple can consent to "split" the gift. That way, each spouse is treated as having made a $10,000 gift, so neither will have made a taxable gift. Note that a federal gift tax return must be filed in order to split the gift; the fact of marriage alone will not affect the result.

Finally, note that only Connecticut, Louisiana, North Carolina, and Tennessee still impose their own separate state gift taxes. The rest of the states have no state gift tax, so if you live outside those four states and you're under the federal limit, you're all set.

What about Medicaid? Unfortunately, the general rule is that there is no exemption of any kind for a gift when figuring Medicaid penalties. If you give away $50,000 to one person or $10,000 to five people, it's all the same. The Medicaid folks simply tally up the total amount of gifts made within the last five years and divide by the average cost of a nursing home in your state to come up with the number of months of Medicaid ineligibility, starting on the day you apply.

Indeed there are exceptions for gifts to a spouse, or to a trust for a blind or disabled child, or of a gift of your home to certain people, etc. But for run-of-the-mill cash gifts to family members, be aware that any gifts you made within the five-year period prior to applying for Medicaid may well come back to haunt you, causing a period of Medicaid ineligibility.

Specialized in: Nursing Home Medicaid Qualification - Nursing Home Medicaid Eligibility - How To Qualify For Nursing Home Medicaid
URL: http://www.medicaidsecrets.com
Print article      Bookmark this page
Related Articles 
Distinguish between good and bad care home (Popularity: ): Research indicates the mortality rates at critical care homes are less than the national average mortality rate. Therefore, taking your critically ill in accordance with one of these homes would increase their survival rate tremendously. However, you should observe that while all homes work at enhancing the welfare of the patient, some facilities are better. It is therefore necessary to choose the best critical care homes for the patient. The ...
Services Provided by Home Care CT Agencies (Popularity: ): When considering home care CT residents should understand their options for services so that planning for a sick or injured relative’s care will go smoothly and everyone will know what to expect. For in home care CT agencies typically offer personal care, homemaker and companion services.Personal Care Home care CT agencies supply personnel such as nurses’ aides or certified nursing assistants (CNAs) to assist patients needing help with their activities of ...
How to Choose Between New Jersey Home Care Agencies (Popularity: ): When a family learns that a loved one needs daily medical assistance, the decision must be made on what option will be the best fit for the entire family. While skilled nursing facilities are available for short and long term care, many families prefer for their relative to remain at home for their care. That is where New Jersey home care agencies can help families keep their loved one at ...
Medical Walkers - What Brands and Features Are Available? (Popularity: ): Life is tough enough when you have mobility problems. When just walking to the mailbox is too much, using a walker is a big help. There are plenty of options in medical walkers, so there should be no problem finding on that will suit your particular needs. What helps is knowing the brand names, model numbers and features are out there so you can make an informed decision and a ...
Proactive Care - Staying in Tune With Our Elderly Parents (Popularity: ): Aging is a natural process. We cannot reverse it or prevent it. It's another stage in our lives. Our retirement years are just another stage in our lives. During our retirement years we undergo physical, mental and emotional changes. As your parents age you may notice these changes. This is the time to get involved in your parents lives. Taking a little bit of time to stay connected with our ...

Related Business 
Singapore Florist Gifts (Popularity: ): New year flowers to Singapore, new year flowers to Singapore, send gifts to Singapore, new year gifts to Singapore, new year hampers to Singapore, new year gift basket to Singapore, send presents to Singapore, new year presents to Singapore, holiday gifts to Singapore, holiday hampers to Singapore. holiday gift basket Singapore, gift baskets to Singapore, cake, wine, champagne, chocolates, cakes to Singapore, birthday gifts to Singapore, anniversary gifts Singapore, wedding ...
Medicaid Annuity California (Popularity: ): PlanningAPS is one of the renowned companies in California who are specialized in medicaid planning annuities. We provide the most comprehensive planning and legal options of how to utilize Medicaid compliant annuities, long term care insurance, single premium life insurance, funeral trusts and burial plans so you can qualify for Medicaid and Veteran’s benefits, while retaining and preserving the largpic1est allowable amount of your money and assets.
Hong Kong Florist Shop (Popularity: ): Send Flowers to HongKong, send gifts to HongKong, new year flowers to HongKong, new year gifts to HongKong, holiday gifts to HongKong, holiday hampers to HongKong, new year hampers to HongKong, new year gift basket to HongKong, HongKong flower shop, gift hampers to HongKong, gift basket to HongKong, cake to HongKong, wine, champagne, chocolates, birthday gifts, anniversary gifts and more gifts to HongKong.
SPAN Enterprises LLC. (Popularity: ): The Heavy Vehicle Use Tax or HVUT or Form 2290, as it is popularly called the fee IRS wants you to pay annually on heavy vehicles operating on public highways at registered gross weights equal to or exceeding 55,000 pounds. Exempt carriers may be required to file tax forms with the IRS or notify the local department of motor vehicles (DMV) of the exempt status being claimed.
Honeymoon Packages (Popularity: ): We are serving over 50,000 people every year in the field of tourism. Its pleasure for me to introduce myself as a Professional Travel Service Provider in Chennai (India).Since Traveling is a part of life, it doesn’t matter that it’s for Educational purpose, Business purpose, or for leisure or pleasure.
Promotional Items & Corporate Gifts Delhi (Popularity: ): Gifts have always signified an expression of love and affection by an individual person for close friends and relatives. A gift is considered to be one of the most symbolic gestures of a person’s closeness with another person. Festival time is a time for rejoicing throughout the world and is prevalent in each and every country across the globe. Festival time is celebrated throughout the world of which some of ...
Law Office of Ernest M. Schlereth, LLC (Popularity: ): Anchorage attorney focusing on Medicaid and Medicaid trusts.
Send Gifts To India (Popularity: ): From the enlightened brightness of Diwali to the ultra modern New Year's Eve parties, India is a blend of the rooted and the contemporary, of the old and the new. However, what binds the two is their penchant towards celebrations and are augmented with beautiful and innovative gifts, thus people send gifts to India. If you stay in India or abroad and wish to send gifts to India or any ...
Centers for Medicare and Medicaid Services (CMS) (Popularity: ): Agency that administers Medicare, Medicaid and the State Children's Health Insurance Program (SCHIP).
The Law Office of Steven J. Sklar, PA. (Popularity: ): The Law Office of Steven J. Sklar, P.A. focuses on helping clients confront the challenges of aging. We help seniors navigate through the complex legal issues that effect them and their families, including Long-Term Care Planning, Medicaid planning, Medicaid application assistance, Medicaid fair hearing assistance, estate planning, probate and guardianships.