How is fair market value determined on real estate transfersSubject to th 5 year Medicare look back rules
State/Country relating to question: Michigan
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Hello. My name is XXXXX XXXXX X will be glad to help you.The fair market value would be determined in most cases by simply performing a comparative market analysis to compare the subject property to the similar properties sold at the same time and the fair market value will be around the average of the price that similar properties sold for in the same geographic area.
My parents are gifting me some real estate . It is my understanding that there is a 5 year look back for MedicaidIf my parents 1 or both need to enter a nursing home. There would be a look back penelty if they went into the nursing home before the 5 year look back is concluded. They cost of the penalty is the fair market value of the property at the time of the gift. How would this determined. I have read where it is the tax assessed the year of the transfer 2012. If they never enter a nursing home there is no look back Penalty. Do you agree with this
Thank you for your follow up.The "penalty period" is the period of disqualification from Medicaid benefits for institutional or long-term home care which is imposed if a "transfer" is made during the "look back" period. The "penalty period" is not the same as the look-back period. The length of the penalty period is calculated by dividing the amount transferred, less any value received, by a figure known as the "average monthly cost of care" in effect during the month of application.
Yes but how is the amount of the value determined when it is Real Estate. They are gifting me the property for $0.00.
Thank you for your follow up.It will be determined based on the Appraisal and comparative market analysis of the similar properties that were sold at the time the house gets transferred to you.
Experienced Licensed Attorney / Real Estate Law Mentor
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