My father is 92 and lives in a nursing home. He has not paid taxes in several years, stating someone told him he does not have to file taxes. He still has a home in the community and some assets he wants leave to a disabled son, but I am worried that it will not possible in the future. Is there anything I can do for him?
Without any change in a home it should not impact taxes very much at all other than writeoffs for repairs on any income property, and whatever.
You should also make certain Dad has a will stipulating he is leaving his home to his son, with an executor appointed, and I would see an elder law attorney (Dad's assets pay if you are POA) to see about giving home to disabled child, as this prevents some medicaid clawback often enough.
So basically you are looking at questions that need answers of experts in the field.
He may have been told by IRS he no longer had to file. Taxes are based on yearly income not what he has stashed away unless he gets a lot of interest on his savings.
My Mom and MIL, both widows, with their SS and small pension didn't bring in much more than 20k a year each. They paid no taxes because most of their income was Social Security and SS is not taxable unless you have other income and that income has to go over a certain threshold before u need to pay taxes.
If your disabled son is on Social Security Disability with Medicare and Medicaid, your Dad giving him any money will effect his benefits. Maybe not SSD and Medicare but could effect his Medicaid. I had to put my nephews money he received from his Moms insurance into a Special Needs Trust before I could get him help. I would check this out before I allowed Dad to give him money.
The next would be if Dad will need Medicaid to pay for his care in the next 5 years. In that time he can not give any of his money away. It needs to be used for his care. The house is an exempt asset but his SS and any pension he receives will be used to offset the cost of his care with Medicaid paying their share. So, might as well sell the house for his care if no one is willing to pay taxes, utilities and upkeep. And it has to sell for Market Value. And if not sold, when Dad passes a Medicaid lean will be placed on the house. Then the house will need to be sold to satisfy the lean. There are rules concerning someone living in the house or renting the house.
My dad did not have to file returns based on his SS and some interest earned on a property that he sold on terms. He didn't earn enough to make his SS taxable. This was determined through a CPA. I recommend that you check IRS.gov and then speak with a tax professional to make sure you understand what needs to be done. Especially if you are looking for an inheritance, you want to know what he needs to do but, if he is on Medicaid they should be paid back from his assets before he leaves anything to his children.
Obviously a child born with disabilities is an entirely different issue and I would assume that provisions were made many years ago.
I suggest you speak to an attorney about your father's exact circumstances, as well as for state and local rules.
From the TurboTax website regarding Seniors filing a tax return:
"For tax year 2020, you will need to file a return if:
-you are unmarried,
-at least 65 years of age, and
-your gross income is $14,050 or more
However, if you live on Social Security benefits alone, you don't include this in gross income. If this is the only income you receive, then your gross income equals zero, and you don't have to file a federal income tax return."
The IRS always gets its pound of flesh, and you have to file an estate tax return after he passes, so you might as well get this cleaned up while he's still here.
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