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rtinvestr · Dec 21, 2011, 08:58 PM

My 90 mom w/ alzheimers lives with me. My brothers and I have POA in all affairs. She contributes a fixed amount of money to my home every month. In addition, she pays part of utilities, food and personal expenses. Would the IRS consider any of these monies to be income?

MukatA · Dec 22, 2011, 12:01 AM

No. Your mom is sharing the expenses.

AtlantaTaxExpert · Dec 22, 2011, 09:28 AM

Agreed. The only time the IRS considers rental income is if the parent is living in a separate house or apartment. If your mother lives in your house with her own room, the IRS does NOT want you to report her payments as income.

Now, if you are pay more than HALF of her total support, you can also claim her as a dependent of your tax return.

purfact · Dec 30, 2011, 08:25 AM

It seems to me that she is a part of your family and is contributing as a member to household expenses. Under this same idea significant other does not add to tax burdon to the person they are living with. I might change the way money is given though, using her account to pay for items and not go directly to your bank account. Are you using her as a dependent? Does she file taxes? Is her contribution more than what is necessary to sustain her in your home?

rtinvestr · Dec 30, 2011, 08:59 AM

Hello Purfact. Thank you for taking the time to contribute. She is not a dependent. My brothers and I have POA. She files a tax return and pays taxes. As to her contribution, if she had no money, we would take care of her to our best abilities. So in reality, it is more than what is necessary. Any contribution would seem to me to be somewhat subjective. She is 93yo w/ alzheimers and requires tremendous attention. Her contribution ($3600/month + personal expenses, total appx 5K/month) is less than it would cost her estate to get her full time professional care and is considered acceptable by the three of us with POA. She is cared for without compromise and doing remarkably well since moving in with my family. Her condition is actually improving which is almost unheard of in Alzheimers patients.

AtlantaTaxExpert · Dec 31, 2011, 01:59 PM

Glad to hear that your mother is improving.

However, the amount of her contribution ($3,600) that EXCEED her personal expenses would tend to be viewed by the IRS as self-employment income for the care you are providing.

RUN to a local, experienced tax professional for a consultation on this matter. You do NOT want to be on the wrong side of the law if the IRS makes the same determination.