WATERTOWN, N.Y. (WWNY) - There's a difference between the rules for making gifts for purposes of Medicaid and the rules under the IRS for gifting. Local attorney Marcy Robinson Dembs, a partner with Barclay Damon, appeared on 7 News at Noon on Monday to talk about the rules. Watch her interview above.
She said under the IRS rules, a person can give up to $15,000 to as many people as he wants each year without having to file a gift tax return. If he gives more than $15,000 to any one person, he has to file a return, but no tax is due until he gives away a total of more than $11 million.
However, Medicaid is a needs based government program so any gift you make can affect your application for Medicaid. If you make a gift and apply for Medicaid within 60 months of the date of the gift, your application for Medicaid will be denied. And, a “gift” is any transfer made for less than full market value, so, for example, if you “sell" your house worth $100,000 to your son for $50,000, you have made a gift of $50,000.