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dog156 · Sep 3, 2014, 06:59 AM

My mother is 76, just became US citizen went back to Russia and sold her apartment there. She wants to transfer me all the money from sale as a gift. Then, she is coming back to the US to live in my house permanently. She can not receive any SS. I will fully support her. Does she still have to pay taxes on her gift to me? Can she still be able to get Medicaid?

ebaines · Sep 3, 2014, 08:02 AM

If she makes a gift to you in excess of $14,000, then she will have to file a gift tax form, but won't actually owe any gift taxes unless her gift(s) over the years exceeds $5.3 million. As for Medicaid - in general transferring assets within 60 months of applying for Medicaid will count against her, and may make her ineligible for some period of time depenxing on the size of the gift and the cost of medical care.

joypulv · Sep 3, 2014, 08:05 AM

She has to file a US tax return, even if she owes no tax. So she can't file for Medicaid for 5 years after that, and after her assets are down to something like $2,000 (it changes). OOPS! Just read that the asset limit is gone, as part of the Affordable Care Act. So she can apply whenever she wants. I didn't delete my sentence about assets because I don't think many people realize the new federal law. Medicaid is now only about INCOME, not ASSETS. Not sure how I feel about that personally, but that's how it is.

If she gives you the funds, the YEARLY gift tax exclusion amount for 2014 is $14,000. The lifetime gift exclusion is currently 5.34 million.

I would suggest that she keep her money. Or give you the annual gift maximum. She could of course spend money on your house.

I am not a tax expert, and there are some on this site. It's possible that the foreign real estate sale actually will have an effect on her application for Medicaid under the new laws.

ebaines · Sep 3, 2014, 10:14 AM

dog156 - please clarify:

1. You asked about Medicaid, but I'm wondering if you meant to ask about Medicare instead, given that your mother is 76 years old? As a US citizen over age 65 she qualifies for Medicare automatically. To qualify for Medicaid your mother's income must be below 133% of poverty level.

2. If indeed you meant Medicaid, is it because she is looking for help in paying for either a long-term care facility or in-home nursing care? If so, then the 60 month rule against transfering assets is still in place, and so her gift to you will count against her.

joypulv · Sep 3, 2014, 10:18 AM

Another part of the Medicaid application includes family members in the same household. So your INCOME would count.