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Department of Taxation and Finance

Volume 5 - Opinions of Counsel SBEA No. 67

Opinions of Counsel index

Aged exemption (income requirement) (moneys received as guardian of incompetent veteran ward) - Mental Hygiene Law, §§ 79.01 et seq.; Real Property Tax Law, § 467:

For purposes of section 467 of the Real Property Tax Law, moneys received from the Veterans Administration by a guardian on behalf of an incompetent veteran ward pursuant to the procedure set forth in Article 79 of the Mental Hygiene Law do not constitute income to the guardian except for the portion of such moneys constituting his compensation for his duties as guardian.

Our opinion has been requested concerning the income requirement of the so-called aged exemption (Real Property Tax Law, § 467). Specifically, we are asked whether moneys received from the Veterans Administration by a guardian on behalf of an incompetent veteran ward are to be considered as income to the guardian for purposes of section 467.

Section 467 authorizes the granting municipality, at its option, to set an annual income limit between $3,000 and $6,500 for the income tax year immediately preceding the date of making application for exemption. Both the town and the school district in question have set the maximum income limitation at $6,500. Subdivision 3(a) of section 467 provides in part as follows:

Such income shall include social security and retirement benefits, interest, dividends, total gain from the sale or exchange of a capital asset which may be offset by a loss from the sale or exchange of a capital asset in the same income tax year, net rental income, salary or earnings, and net income from self-employment, but shall not include a return of capital, gifts or inheritances. . . .

For purposes of this inquiry, we assume that the applicant satisfies all of the remaining requirements of section 467 (e.g., length of ownership requirement) and that the only question is as to her income. It is stated that she receives social security, and a widow’s pension from the Veterans Administration. Clearly, both of these payments constitute income within the meaning of the above-quoted subdivision. Additionally, the applicant in this case also has a son, who is incompetent, and receives $687 a month as a service-connected disability pension. These payments are apparently made to the applicant in her status as the committee of her incompetent son. The question is how much of this monthly payment constitutes income to the applicant for purposes of section 467.

Although the applicant is receiving a monthly check of $687 from the Veterans Administration, she is not receiving such moneys in her own right. Rather, she obtains custody over such moneys by reason of her status as “guardian” or “committee” of her incompetent veteran son. While it is not clear from the inquiry, the applicant was most likely appointed as her son’s guardian pursuant to Article 79 [formerly article 5-B] of the Mental Hygiene Law. Pursuant to section 79.21 [formerly § 115-j] of such law, the guardian is entitled to compensation for administering the estate of the ward. Such compensation is fixed by the court. In our opinion, this compensation would constitute income to the applicant for the purposes of the aged exemption. Pursuant to section 79.41 [formerly § 115-t], the guardian is to keep the funds received by him in his capacity as guardian separate and distinct from his own personal funds. Finally, the guardian is expected to file annual accounts with the court reflecting the manner in which the ward’s moneys were used for his support and maintenance. Thus, the guardian has limited control over the ward’s moneys.

Based on the foregoing, it is our opinion that, except for those moneys received by the applicant as compensation for her duties as guardian, the moneys received from the Veterans’ Administration on behalf of the applicant’s incompetent son are not income to the applicant for purposes of section 467 of the Real Property Tax Law.

April 28, 1976