We are paying all the utilities, his food, taxes, etc. Nothing is in his name. He has his own living space, bedroom and garage. He would like to pay me rent on a monthly basis, but I am concerned this would affect the Medicaid look back period if he needs nursing home care in the future. Does anyone know if this can be done without affecting this? Would this be considered a gift since it would be on a monthly recurring basis? He is in decent health now and is independent.
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Evanders suggestion of getting a Realtor or Rental agency to give you a comparable rental is an excellent idea.
You would figure out what the house, utilities, insurances, taxes, food, etc. expenses are and have him pay a third or half. He can make payments to the utility companies and insurance companies directly, buy the groceries and other items so that it is obviously not a gift. Or he can withdraw cash and pay you that way, if you do it that way, keep a record of how the cash was spent, so rent $xxx, insurance, $xxx, power co $xxx and on and on.
If you would like additional information on how to do this please private message me.
Alternatively, he could gift you up to $15,000 per year without affecting either your income taxes or his need to report such gift to the IRS or affecting his lifetime gift tax exemption. Of course, as you know, such gifts could affect his Medicaid eligibility if he needs such assistance within five years of gifting. The Medicaid ineligibility period for such gifting would be be determined by the cost of care needed and the amounts gifted, so you could save his gifts to you to help him through any future ineligibility period.
Although Medicaid is a federal program, each state has different specific rules, so it's usually a good idea to get advice from a Medicaid expert with experience in your state before you make any irreversible decisions. Best wishes.
Bicycler raises some important considerations. Charging him rent can 'open a can of worms' so to speak tax wise. If nothing else, your tax return would best be prepared by someone with experience. (i.e. It would cost more to prepare.)
First, I would start using his income to directly pay his expenses. I.e. Use his checkbook or card to pay directly for his groceries and care items. Use his checking account to pay one of the utility bills directly. Same If you need to pay for someone to assist you with his care, etc.
If there is additional money beyond his direct expenses, consider things like paying rent to you.
Note: I am a tax preparer, not a elder care planner so take the following as opinion concerning medicaid: I believe re-imbursing you for expenses you have incurred to date on his behalf would be reasonable. However, you might want pretty solid documentation especially if this is a large amount. Writing you a check looks a lot like a gift on paper.