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by the individual during the individual’s lifetime. • Income producing real property that is used in a trade or business can be transferred without application of the $6,000/6% limitation. In order to qualify as a trade or business, the property must be actively managed or operated by the applicant/recipient. • Income-producing real property for which the individual owns a government permit or license, or other governmental authority to engage in income-producing activity is not subject to the • $6,000/6% limitation. Examples of this are commercial fishing permits and tobacco crop allotments issued by the USDA. (This does not include crop subsidies and soil banks.) Both of these circumstances are very uncommon in Indiana, therefore, if DFR is processing a case in which the individual claims to own such property, the Policy Answer Line must be contacted. When contacting PAL, be sure to explain what type of license or permit the individual submitted as verification. Example 1: A Medicaid applicant in nursing facility owned rental property with an equity value of $50,000. The applicant/recipient received $2,400 per year in rent. The month before applying for Medicaid, they gave it away to a relative with no consideration received and did not show that the transfer was made for any purpose other than qualifying for Medicaid. The uncompensated value is $44,000 plus the amount of income that was transferred based on the applicant/recipient’s life expectancy at the time of the transfer.

Example 2: A Medicaid applicant in nursing home owned farmland with an equity value of $100,000 which they cash rented to their child who paid all of the expenses and gave the member $100 a year income. The uncompensated value is $100,000 (plus the amount of income that was also transferred) because the property did not produce at least $360 annual income for member.

Example 3: A Medicaid recipient in a nursing facility owns a 25% share as tenancy in common, in rental property valued at $200,000. Their share is $50,000 and they receive FMV rent of $2,100 per year. The applicant/recipient gave their share of the property away to their child and received no consideration. The uncompensated value is $44,000 plus the amount of income that was transferred. 2640.10.15.06 HOME EQUITY RESTRICTION A penalty consisting of ineligibility for LTC services is invoked due to the ownership of the home if the applicant’s equity interest or share of equity interest, in his or her home is greater than the home equity limit: • 11-01-09 $500,000 • 01-01-11 $506,000 • 01-01-12 $525,000 • 01-01-13 $536,000