Weird Wholesale Question

[Eric Johnson]

I just received a weird request from one of my sellers. My seller is currently receiving Medicare. I just received a call from one of my buyers who's willing to buy the house. However, my seller asked if the purchase price could be manipulated on the contract because if Medicare found out she just received say 26K for a house, it could affect her coverage. I just called my title company to ask about this but is this an unusual request? Has anyone dealt with anything similar?

[Account Closed]

Medicare isn't need or income based. I don't think it's her Medicare benefits she's worried about, but rather her Medicaid benefits. If she is a senior, Medicaid pays her Medicare premiums and probably most or all of her other medical costs.

I work with a lot of sellers in this situation, but I would not assist anyone in covering up income. The sale of the house is going to be reportable income for someone, so it's best to figure out who it's going to be and who will take the least tax hit. She seller has choices. She may be able to gift deed the property to a relative. The relative can then sell it and decide best how to use the proceeds for the seller's benefit. The other choice is for the seller to use the $26K to pay for her premiums and medical costs. Just saying.

Be careful about asking a title/escrow companies or escrow lawyers to help you help the seller defraud the government. Not reporting income and disguising income when qualifying for benefits is fraud. Your title company may red flag you and put your future deals through extra scrutiny.