Nursing Home, QIT, Medicaid, Spousal Diversion & Income Tax

I assume we are discussing what is usually referred to as a Miller Trust. Your dad's income exceeds the allowable amount for Medicaid and under state rules the trust was created. The trust can provide a benefit to the well spouse as long as the well spouse's income is below a certain threshold. This trust is a grantor trust. As such, it is disregarded for tax purposes. A tax return for your father (I assume it will be a joint return with his spouse) is filed in the normal manner. I.e., income would include any of the line items you see on a 1040. The trust does not file a tax return.

Usually, the state department (E.g., Dept. of Human Services) that runs the medicaid program sets the guidelines for creating the trust and typically requires an annual accounting (not a tax return).

responding to

Thank you for your reply.

Don

Further it seems to me that the amounts paid to the nursing home would be a medical expense deduction.

responding to