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Question for the Money Doctors

Question submitted on Sep 3, 2013.

Question

Does a person that is in a nursing and is co owner of home that is for sale have to give her share of the profit to the nursing home or medicare?

Answer

Your question is generally related to Medicaid, but more recently, there has been much talk about the new 3.8% Medicare surtax.&ampnbsp The two programs sound somewhat alike but are very different. To add some confusion, much misinformation has been circulated about how the 3.8% Medicare surtax relates to home sales. The surtax only applies to individuals with an adjusted gross income of $200,000 (or $250,000 for married couples). Furthermore, for such taxpayers, the Medicare surtax would only apply to the sale of a primary home if the sale results in a gain in excess of the applicable capital gain tax exclusion ($250,000 for individuals and $500,000).&ampnbsp So, few taxpayers are affected by the Medicare surtax.

If the person in the nursing home is a Medicaid recipient (not Medicare), the issue is much different.&ampnbsp Medicaid may recover spending on behalf of the recipient from equity held on his or her house.&ampnbsp Much information is available about it at:

However, rules vary by state, so contact Medicaid in the state where you live or contact an experienced elder law attorney before making real estate decisions. nbsp


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