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Old 10-22-2013, 01:15 PM
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Caregiver exemption subletting

Hi,

Thank you for taking the time to read this.

I am living in my mothers house in Massachusetts. I am on SSDI. I took care of my mother, who is now in a nursing home. Medicaid allowed the caregiver exemption that lets me stay in her house, pay all the bills (mortgage, taxes, utilities...) and keep her house out of the assets that Medicaid takes when someone goes into a nursing home.

I need to have someone move in to share expenses.

1. Is that taxable income?
2. If so, in what category?
3. Is there a limit on what I can take in, below the cost of the total household expenses?

Any additional information, tips or suggestions would also be appreciated.

Thank you again.



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Old 10-23-2013, 12:55 AM
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Quote:
Originally Posted by JMJ2013 View Post
Hi,



#1. Is that taxable income?



#2. If so, in what category?


#3. Is there a limit on what I can take in, below the cost of the total household expenses?
#1;If yu own the home, then the income you receive from renting out a part of the home must be reported on your tax return. The expenses for that part of the home can be deducted as an expense. These must be reported on the IRS 1040/ on Sch E of 1040;however, the owner of the house is your mother, and she lets you me stay in her house (you do not pay any fair market value of rent to your mother). If your mother requires you to live on the property in order to perform your job duties (on-site management of rental properties, caretakers, etc), it is non-taxable to you performing your duty. So if you are maintaining the property, and it is "for your mother’s convenience" and the free rent is not taxable. UNLESS you ar the owner of the house, it is not your rental income to be reported on your return. Otherwise, your mother must charge fair-market rent (taxable income to her).As long as your mother lets you someone move in to share expenses (and the tenant pays rent to you and you keep it), then, it is a gift, I guess, for you.As long as you get rent free occupancy without having to do anything, the transfer is gratuitous i.e. a gift. if you're receiving SSDI benefits and the SSA finds that you're engaged in work that it considers substantial it has the authority to require you to repay the benefit overpayment amounts and/or cancel your SSDI eligibility altogether. So you need to find out how a gift could affect your current benfits. You should know that disability benefits are not typically affected by extra income. This is because people become eligible by meeting all the criteria and also paying into the system for years through a job. Thus, they are usually able to receive cash gifts without affecting their case either way. The problem arises when you also receive Medicaid or SSI, as these programs do consider any additional income. I guess you ned to contact SSA fro more accuarate info in detail.

#2;As long as the free rent/rental income from a tenant(actually it is your mother’s rental income as she owns the house) is a gift, you , as a done, do not need to report it on your return.



#3.I guess you can check it with a r/e agent in your local area for property FMV of rent in the area.



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Old 10-23-2013, 01:12 AM
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Clarification of caregiver.

Hello Wnhough,

There is an exemption when someone on SSDI is a caregiver for a parent. This exemption allows the caregiver to stay in the house after the parent goes into a nursing home, until they die. When the parent dies, the house goes to probate or whoever was in the will.

In the meantime, the caregiver can stay in the house and is responsible for paying the expenses for the house. I am not being paid, I am paying to live here.

I am using almost all of my SSDI to pay the bills here. There is not even enough left over for food. I have run through my savings and some borrowed money working to fix up part of the house to rent so I can get enough to pay the bills and eat.

I just need to know if it is allowed and doesn't mess me up.

The first answer didn't make sense, but I assume it is because I was not clear enough. I will check with SSA for how they view it.

If I have someone move in and they share expenses, how is it viewed by the IRS?

Thank you



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Old 10-23-2013, 01:21 AM
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So you mean you are usually able to receive cash gifts without affecting your SSDI bebefits from SSA?? Frankly, I have no idea on this.



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