My mother has dementia and is in assisted living. Her total assets right now are $11,000. I had to do a spend down to get her Medicaid. Two years ago she liquidated some investments. She gave me the money to purchase a home she could live in with me. Now she’s going to assisted living. She only provided the tax preparer part of the documents regarding the distribution. I got a letter today saying there is a $177,000 discrepancy! If she owes 15% capital gains that about $25,000! There is no way she can pay that. What should I do?
Your post is very confusing, talking about "capital gains" which is paid on the sale of a home, vs normal taxes paid on income and interest.
You need a lawyer to guide you now, not random folks on an internet forum.
bogleheads.org
Crowdsourcing, like this one, but regarding all things money, assets, financial, etc.
The first attoreny I would hire is a tax attorney, then after that it may require an elder law attorney versed in Medicaid.
This is complicated legal problem.
Your mother has no assets and she may need to apply for government help from Medicaid. My worry is that she may not be able to get it.
She has no money. She has no income. They will not take SS.
You, however may stand to lose your home, be accused of some sort of fraudulent behavior if you were aware of this transaction, or sustain other problems.
You say YOU got a letter today.
Can you tell me why YOU got a letter, and not your mother?
Do see an attorney and take an honest and complete document about what occurred on what date if you are able.
I wish you best of luck.
I agree, we are layman and I think an elder lawyer is needed.
Just a question, I know things have changed but it used to be if you sold a house and bought another one within 2 years, you paid no capital gains tax?
Hire a Certified Elder Care attorney who's versed in Medicaid and IRS matters to guide you thru how to handle this situation. It's unfortunate you didn't hire an attorney before buying and selling homes!
Good luck to you.