You describe a Medicaid planning strategy available in some states and not others. For it to work, the nursing home resident needs to transfer the funds entirely to you, half as a gift and half as a loan. The result is that this is your money, even though you will be committed to paying back half. So you should report it wherever you are required to list your assets. However, the payments to you are not income so you should not report them as such. In addition, the promissory note is an obligation to pay on your part, so it would be listed as a liability if you are asked to list those as well.
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