Discussion:Election to claim medical expenses on final 1040
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| The question: I assume that the exclusion from the 10% penalty will apply on the final 1040, even though the medical expenses were not actually paid in 2008 tax year, but are allowable under the election. Am I correct? Personal rep wants to know so that she can close out estate, but not have to later come up with funds to pay additional tax if IRS disallows the 10% exception.}} | The question: I assume that the exclusion from the 10% penalty will apply on the final 1040, even though the medical expenses were not actually paid in 2008 tax year, but are allowable under the election. Am I correct? Personal rep wants to know so that she can close out estate, but not have to later come up with funds to pay additional tax if IRS disallows the 10% exception.}} | ||
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| + | {{ForumReplyPost|UserID=Dennis|Date=2 November 2009|Text=[[Sec. 213]](c) | ||
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| + | The survivor or personal representative of a decedent can choose to treat certain expenses paid by the decedent's estate for the decedent's medical care as paid by the decedent at the time the medical services were provided. The expenses must be paid within the 1-year period beginning with the day after the date of death. If you are the survivor or personal representative making this choice, you must attach a statement to the decedent's Form 1040 (or the decedent's amended return, Form 1040X) saying that the expenses have not been and will not be claimed on the estate tax return. | ||
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Revision as of 17:25, 2 November 2009
Discussion Forum Index --> Tax Questions --> Election to claim medical expenses on final 1040
| 2 November 2009 | |
| Here's my situation: Client was age 58 in 2008, and withdrew about $12,000 from IRA in mid-2008. Client died from an accidental fall on Dec 12, 2008. He was in the hospital for about two weeks prior to death and incurred medical bills of over $100,000 (no insurance). I prepared the final 1040 for 2008 tax year and elected to claim medical expenses paid w/in one year of death on final 1040. Also filed Form 5329 excluding 10% penalty due to medical expenses in excess of 7.5% of AGI. AGI on final 1040 was about $16,000 - no tax liability on the final 1040.
Estate is not large enough to have a filing requirement for estate tax, but does have sufficient assets to pay medical expenses. Estate has not paid any medical bills yet. I want attorney and personal rep to pay at least enough by Dec 10, 2009 to show no tax liability on final Form 1040 -- I will amend the originally filed return to show actual amount of medical expenses paid under the election. The question: I assume that the exclusion from the 10% penalty will apply on the final 1040, even though the medical expenses were not actually paid in 2008 tax year, but are allowable under the election. Am I correct? Personal rep wants to know so that she can close out estate, but not have to later come up with funds to pay additional tax if IRS disallows the 10% exception. | |
| 2 November 2009 | |
| Sec. 213(c)
The survivor or personal representative of a decedent can choose to treat certain expenses paid by the decedent's estate for the decedent's medical care as paid by the decedent at the time the medical services were provided. The expenses must be paid within the 1-year period beginning with the day after the date of death. If you are the survivor or personal representative making this choice, you must attach a statement to the decedent's Form 1040 (or the decedent's amended return, Form 1040X) saying that the expenses have not been and will not be claimed on the estate tax return. | |
