Discussion:"Certified" as Chronically Ill

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Discussion Forum Index --> Tax Questions --> "Certified" as Chronically Ill

Jdugancpa (talk|edits) said:

10 March 2006
Client's mom fell in her retirement home and after being discovered was taken to the hospital. In consultation between daughter and docs, it was determined that mom could no longer live alone due to Alzheimers/dementia. Cost of nursing facility is about $36k. Daughter provides medical records showing clear indication of dementia. I look at research and find IRS Notice 97-31 providing interim guidance on LT health care services, and Code SEction 7702B which defines a chronically ill individual. Section 7702B(c)(2) states:

"The term 'chronically ill individual" means any individual who has been certified by a licensed health care practitioner as--...(iii)requiring substantial supervision to protect such individual from threats to health and safety due to severe cognitive impairment. Such term shall not include any individual otherwise meeting the requirements of the preceeding sentence unless within the preceeding 12 month period a licensed health care practitioner has certified that such individual meets such requirements."

I gave this info to the daughter who went to the doc in an effort to get "certification" and what the doc gave was copies of the medical records I already had, with a couple of hand written notes in the margin stating, "Diagnosed with Alzheimers in 2002" and "Patient unable to live alone, requires this level of care" (next to a passage in the medical record stating "She recently moved to XXX in the last 3 months, which is a high level of assisted living where medications are given to her regularly."

The question, therefore, is: What constitutes "certification" as referenced in the above code section. I have not been able to find anything that defines it. I have recommended the client take the deduction (on mom's return) but have informed her that I don't really know if our documentation will pass muster regarding "certification." I have also suggested she draft a letter and stick in under the doctor's nose to get him to sign it each year in order to protect the deduction for 2006 and beyond.

Anyone have experience in this arena?

Jdugancpa (talk|edits) said:

10 March 2006
Is this question too dumb, too hard or too boring to obtain any feedback from? Only 16 lookers and 0 responses.

Dennis (talk|edits) said:

10 March 2006
It's really a gray area. Personally I think you're being overly cautious. You use the term nursing home, but the cost seems closer to assisted living. You might check with the facility to see if they provide a breakdown for medical.

Jdugancpa (talk|edits) said:

10 March 2006
Nursing home or assisted living doesn't matter, in that as long as she meets the requirements of 7702B and Notice 97-31 and has a physician "certify" her need for care, the full cost is deductible. Am I wrong in this understanding? I have the monthly statements which breakdown as $2346 for private rent and $702 as personal care. Some months there are charges for guests and I have excluded those charges but everything else I intend to deduct.

HPTAX (talk|edits) said:

10 March 2006
After taking a look at IRB 97-21, I don't think you have to worry about the certification. The doctor certified that she has Alzheimers, which falls under the safe harbor of the Cognitive Impairment Trigger. The doctor doesn't need to certify the 2 of 6 ADL trigger, etc.

Jdugancpa (talk|edits) said:

10 March 2006
Yes, I agree she meets the cognitive impairment trigger. My only questions is whether or not the documentation I have constitutes adequate "certification". I think my conclusion is that I would like to have something more clear but I am willing to go with what I currently have.

HPTAX (talk|edits) said:

10 March 2006
The nursing home records should certainly have information in support.

Slallison (talk|edits) said:

30 March 2006
I don't know if this will help you, but my Grandmother receives a 1099-LTC which has a check mark showing that she is chronically ill. It's the only experience I have in this area.

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