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MequonCPA
MequonCPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2342
Experience:  CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
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I heard we can gift up to $12,000 per child per year in ...

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I heard we can gift up to $12,000 per child per year in Wisconsin. Now I'm hearing that the money could be called back within the next five years if I enter a nursing home and my assets can't cover my expenses. Is this true? Even if I gift not knowing if I will ever have to go to a nursing home? I would think if I had knowledge of going in a nursing home that the circumstance would be different. What is the law on this? Do the kids have to save this in a specail account and not spend it until it enters the sixth year?

DearCustomer-

The $12,000 amount relates to the amount you can gift for federal purposes to avoid filing a gift tax return. Even if you make taxable gifts, there is no tax to pay until you make $1million in taxable gifts.

There is a separate 60 month rule with regard to eligibility for medicaid. It is true that the amounts can be factored in when determining when you may be eligible to take advantage of medicare.

It wouldn't hurt if the funds were retained in a special account in case that particular situation arises. This can be particularly important if you anticipate the need for that type of service within the next few years.

Customer: replied 8 years ago.
Reply to Steve's Post: Is the last word in the second paragraph medicare or should it be medicaid?
My error, should be medicaid.
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