Skip to main content

Who gets the rental income on a life use estate, and who declares the income and deductions and depreciation on tax returns?

New York, NY |

My parent transferred her real estate (house) in upstate NY to my sibling over 7 years ago, who transferred it to me last year, along with a life use estate clause of the parent in the deed. The parent has not lived there for 5 years. I am the parent's legal guardian since early last year. I began to rent out the house last year and my mother reimbursed me for significant expenses in bringing the house up to rental condition. In addition to question above, if my mother needs to enter a nursing home in New York City, will the reimbursements be viewed as transfers to me by Medicaid in the 5 year look back period?

Also, if I sell the house now, are the proceeds viewed as the parent's for purposes of Medicaid?

+ Read More

Attorney answers 3


This answer comes from a Missouri prospective. Generally the life tenant gets all income for the property for their life. That would also give them the deductions and depreciation for their life. As to the transfers they may be counted , it will depend on how New York views these funds . It can be claimed that it is like a loan or your mom putting money into her home as opposed to makeing gifts to someone. You need to consult with a New York attorney.


The life tenant is entitled to the rental income. You may want to speak with a Real Estate attorney in your area. Look on under Find-A-Lawyer. Good Luck!


It is includedin the lookbackk and the computation is then made for a period of ineligibility re: a nursing home based upon a formula subtracting the value of the life estate from the value of the home and then divided by the avg. regional monthly cost of a nursing home. The penalty is less because you did the life estate method rather than outright transfer.

If you found this "helpful" or "best answer," please click it with my appreciation. My response is for educational purposes and does not constitute legal advice nor creates an attorney client relationship which requires all the details and a personal conference.