I am inheriting as a gift around 50,000. How can I legally not claim this as income?

Question

I am on medicaid and do not want to get kickedoff, so can I invest this into something that will make it not claimable as income. This is an inhertance but given as a gift.

Answer 1

You need to clarify. Is this an inheritance? Money from the estate of a dead person? Or is this a gift from someone still living?

Answer 2

An inheritance is different from a gift, but neither is taxable to you for income tax purposes.

As far as medicaid, it's a low income program. If you get $50K you aren't low income. You could check with the medicaid people to see if a one-time income like this would make you ineligible, but if it will, you can't just invest it somewhere and avoid that. Investing it might keep you off Medicaid for the longer term, since whatever you invest it in would be counted as an asset.

Answer 3

1. Any thing (money and property) you receive as gift or inheritance, you (the receiver) don't pay any federal tax liability. It is a non-taxable income.

2. For any State tax liability check at your State's web site. For most of the States there is no tax.

3. If you inherit a property, your cost basis is the valuation (Fair Market Value) of the property at the date of the decedent's death or the FMV (Fair Market Value) on the alternate valuation date if the personal representative for the estate elects to use alternate valuation.

4. If you sell the inherited property at a price up to your cost basis you don't have any taxes due. However, if you sell the property at price more than the cost basis to you, then you pay the taxes on the profit (sale price minus your cost basis).

Answer 4

See an attorney. This isn't the place for legal advice.

Answer 5

Call your tax person they will know.