Discussion:Medical expenses of parent
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Discussion Forum Index --> Tax Questions --> Medical expenses of parent
Still learning (talk|edits) said: | 13 January 2006 |
| Mom gifts son and his wife and two children $48,000. Son pays 48,000 dollars of Mom's 60,000 medical expenses. Can son claim the $48,000 of medical expenses of Mom--she is his dependent except for gross income. He pays over 1/2 of her support. | |
| 13 January 2006 | |
| Let me see If I understand. Mom lays out $48,000 for her own medical expenses, but the son wants to deduct the expenses because the checks were written out of his account? What am I missing here? | |
Still learning (talk|edits) said: | 13 January 2006 |
| The money is gifted to the son. He voluntarily pays her medical bills. | |
| 14 January 2006 | |
| If you are saying that the mother and son had an understanding that the son was free to spend the $48,000 any way he pleased, then I see no problem with the son claiming a deduction for the medical expenses. Remember to file gift tax returns for the $48,000 gift. | |
| 14 January 2006 | |
| The $48,000 was gifted to 4 individuals (see original posting) presumably to avoid gift tax by keeping to the $12,000/person limit. Then son's wife and 2 kids agreed to relinquish their gifts to mom's medical expenses along with son? This might get past IRS scrutiny, but it doesn't smell right. | |
| 14 January 2006 | |
| I would say if they don't meet the gross income requirement thus not able to be claimed as a dependent, you cannot take the deduction. From pub 17:
"For you to include these expenses, the person must have been your dependent either at the time the medical services were provided or at the time you paid the expenses." | |
| 15 January 2006 | |
| The parent does not need to meet the gross income test. See Sec. 213(a). Sec. 152(d)(1)(B) [gross income test] is ignored. | |
| 15 January 2006 | |
| Sounds to me like Mom is just gifting additional itemized deductions for the son? I agree with Rlw, doesn't sound/smell right. | |
| 16 January 2006 | |
| Riley is correct. Qualifying relative for medical deductions does not include the gross income test. Three tests: qualifying relative or member of household, not a qualifying child of someone, and over half of support is provided by person claim medical deduction. See Pub 17 page 136. | |
| 16 January 2006 | |
| Qualifying for the deduction is not really the material issue here. IMHO, this is clearly a case of money laundering for purposes of tax evasion. It's illegal.
If the question is "can one get away with this?", the answer is "probably", because the $48k gift goes (legally) unreported. But I would be wary of advising anyone to pursue this scheme on an open public forum such as this. | |
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