Does anyone have experience in a rental agreement. My mom lives with me. My elder attorney suggested instead of a caregiver's agreement, since they are complex, that I consider a rental agreement. He advised me that I would need to have a realtor come into my house and access the space she is using. He then sent me a letter with his qualifications and what he thought would be a fair market rent. For a bedroom, a tv room, use of the rest of the house and front porch plus utilities includded he assessed it at $875. The neighborhood is desirable. So the realtor gave me a rental agreement to complete, mom signed and every month $875 is taken out of mom's checking account and automatically deposited into a separate account in my name. That's all that is in that account. He didn't say if I needed to get it notorized. He also advised me to call an accountant to see if I need to pay taxes on it. I have not done that yet. Does anyone have any experience with Medicaid and using a rental agreement?
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Also I talked to an eligibility specialist in the South Carolina Medicaid dept and she confirmed that a rental agreement between mom and me was acceptable. It does not have to be notoriz ed and I would need a letter from a realtor as to what the fair market rent would be...which I have. Rental agreement is much simpler to do than a caregivers agreement ...which is also acceptable.
Thanks for everyone's help.
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This needs to be addressed by her tax professional because all of her income and plays a huge role in the answer.
I think depositing your mom's rent into a separate account is a good idea and leaving it there would also be good, at least until you've figured out any income taxes that might be due and assurance that your state's Medicaid office will accept it as your mom's legitimate expense (i.e. not a gift to you). You should probably take the rental contract to your local Medicaid office to get that assurance ASAP. FYI, collecting rent will likely prevent you from being able to claim your mom as a dependent on your income taxes, but that's probably easily a worthwhile trade-off since the tax law changes that took effect for 2018 cut the tax benefit of caring for parents by about 2/3rds of what it was previously.
Kudos to you for taking care of your mom and best wishes for the journey ahead.