Discussion:Assisted living expenses
From TaxAlmanac
Discussion Forum Index --> Basic Tax Questions --> Assisted living expenses
Discussion Forum Index --> Tax Questions --> Assisted living expenses
| 21 February 2008 | |
| TP is legally blind and has moved into assisted living. Not nursing home.
I believe the expense of living in assisted living is deductible because they are to aid in her medical condition. It is not possible for her to live on her own, clean on her own or take care of herself. Obviously luxury items would be excluded but otherwise I believe the expense to be fully deductible. Is this correct? | |
| 21 February 2008 | |
| Some allocation may be allowable, but that would not be your decision. Facility may be willing to document percentage...perhaps doctor. | |
Death&Taxes (talk|edits) said: | 21 February 2008 |
| I am the first one to take this deduction in most cases, but in this case I would read carefully the definitions of qualified long term care in Publication 502
It sounds like there is more to the condition than blindness. | |
| 21 February 2008 | |
| Hi The decision is based on whether the taxpayer meets the definition of a chronically ill individual IRC 7702B(c)(1) unable to perform 2 out of the 5 activities of daily living. Also look at notice 97-31 which defines substantial assistance. bye | |
Ksnoopytax (talk|edits) said: | 21 February 2008 |
| Often times I've gotten a statement from the taxpayer given by the assisted living place which splits out costs for medical care. | |
Death&Taxes (talk|edits) said: | 21 February 2008 |
| I think EK is talking about the whole megilla here. Wes' point expands on Pub 502 and is the gospel. | |
| 21 February 2008 | |
| ok,
i have reread 502 a few times now. and it states you can deduct room and board and meals if you are there to get medical care. Is medical considered the items from 7702b. Having trouble finding 97-31 on irs site. | |
THECPAATHOME (talk|edits) said: | 13 March 2008 |
| I'm having a similar issue here. Client's mother (on her return) has been forced (client says by county) to move to an assisted living facility. She has severe dementia - which I interpret to fall under the Chronically ill paragraph stating "He or she requires substantial supervision to be protected from threats to health and safety due to severe cognitive impairment" She's in the lockdown dementia unit. I called the facility - the director says none is medical and won't give me a percentage. Can that be right? Client wants to take 20%, which is arbitrary but reasonable. What would you all do? | |
| 13 March 2008 | |
| Although the client must be chronically ill, as defined in the code, to claim long term care expenses, taxpayers who are institutionalized for medical reasons can deduct the cost of institutional care, including room and board in an assisted living facility. | |
Death&Taxes (talk|edits) said: | 13 March 2008 |
| Califcpa's point can't be emphasized enough. | |
THECPAATHOME (talk|edits) said: | 13 March 2008 |
| So you'd take the whole thing, even though it's an assisted living facility and not a nursing home? I'm not one to take an aggressive position, but I want to give her what she's entitled to. | |
Death&Taxes (talk|edits) said: | 13 March 2008 |
| Go to Pages 10-11 and read the definition of qualified long term care; you may have to talk to doctors, but dementia surely puts her more than halfway there. "She required substantial supervision to be protected from threats to health and safety due to severe cognitive impairment."
On a personal note, in the last year of my wife's life, I was told by her doctor/psychiatrist that she could not be left alone for more than 20-30 minutes, and could tell tales that would give you the creeps, like the day she took three days worth of 14 different prescriptions. As it was, my wonderful health insurance paid for almost all of it. | |
Death&Taxes (talk|edits) said: | 13 March 2008 |
| We are not supposed to talk this way since we are covered by Publication 230 but in cases like these, I have never seen an auditor go deeply into the matter. "There but for the grace of God....." | |
| 13 March 2008 | |
| In a former life, I was an accounting manager for an assisted living/nursing home campus. We did letters for the residents' tax preparers, breaking out the 'medical' percentage from the monthly rent. In Missouri, seniors also get a credit for rent paid to these places on their state return, so they were able to use both sides, but that's another story. | |
THECPAATHOME (talk|edits) said: | 13 March 2008 |
| Mdwtax - that is what I expected to get when I called the facility, but the director said they don't do that and he said none was medical. I wasn't buyin' it... | |
Death&Taxes (talk|edits) said: | 13 March 2008 |
| It is not the home, but her condition that governs this. It's her doctors you need to be talking with to find out if she is a danger to herself, or look at the other condition about needing assistance to simply live. This is not pushing an envelope at all. | |
| 13 March 2008 | |
| None is just the easy way out and probably easier for CYA. If they don't offer anything, no one can come back to ask them anything.
It can't be none, though. The difference between assisted living and a retirement home is the medical care. It's been 10 years since I was there, and the percentage is probably less than half for medical, but an assisted facility has to have round-the-clock care staff available. | |
