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Subject:  Re: WISDOM PLEASE Date:  6/5/2001  6:32 PM
Author:  lpuzzle Number:  30082 of 88800

If you hide your mothers' money, who will be paying the bills at the Nursing Home? Welfare? Your plan might be considered to be fraud. Or at least immoral. The Government might disallow the Welfare due to the Gifting.
To answer your question, you would need to pay Gift Tax on $13000 of the $23000 in the year that you receive the gift, and you would pay income tax on the $2400 per year at your normal rate.

Unless the tax law still to be signed changes this, no tax is due on the gift at the time of the gift. There is a unified gift and estate tax currently. So, the 13K above the 10K that she could gift to you needs to be reported, but it is just deducted from the lifetime gift and estate value of 675K that she can gift to whoever sh chooses above the 10K/year amount. So, unless at her death she has more than 662K to be inherited, no gift tax is owed. However, I believe, money is still "counted" as part of you mother's assets as far as Medicaid is concerned, if she has given it away within the last two years of needing the Medicaid assistance.
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