katiekay Asked December 28, 2017

Anyone taking memory care expense as a medical tax deduction?

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I know there has been a lot of back and forth with the new tax bill as far as eliminating deductions but as I understand the medical deduction is still available in the new signed tax bill. As I understand it the entire cost of memory care can be used as a medical deduction because cognitive impairment is counted as a medical condition.


I was wondering if anyone has successfully deducted the cost of memory care. My parents are self paying memory care and part of their savings are in the form of IRA and bonds that would generate a tax when cashed in....so it would help if i had this deduction.


Found below in research.. also had a handout from my memory care about looking into this tax deduction.


Because eligibility for the medical expense deduction should not be diagnosis driven, the provision requires the cognitive impairment must be severe. Severe cognitive impairment means a deterioration or loss in intellectual capacity measured by clinical evidence and tests. These tests should reliably measure impairment in short or long term memory; orientation to people, place and/or time; and deductive or abstract reasoning. In addition, it is intended that such deterioration or loss place the individual in jeopardy of harming self or others and, therefore, require substantial supervision by another individual.
In the past, amounts paid to nursing homes qualified as medical expenses only if medical care was the principle reason for the stay, or if not the principle reason, only that part of the cost of care attributable to medical care qualified (not meals and lodging) (Reg.1.213-1(e)(1)(v). The enactment of Internal Revenue Code Sec. 213(d)(1) included qualified long-term care within the definition of “medical care”. This means that amounts paid to nursing homes as well as other long-term care facilities and assisted living facilities can qualify as medical expenses. Provided the person meets either the activities of daily living (ADL) or cognitive impairment requirements and the costs are pursuant to a plan of care prescribed by a health care practitioner, the amounts paid will qualify as medical expenses.

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Llamalover47 Jan 1, 2018
In order to claim medical and dental expenses, the individual's total must exceed 7.5% of AGI.
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Nancynurse Jan 1, 2018
Check to see if there is an AARP site, CASH or VITA site to prepare your parents and possibly your taxes at no charge. I know CASH and VITA are available by calling 211 after the 21st of January. The AARP sites I think you can contact AARP directly to see if they have a site in your area. I volunteer as a tax preparer for the VITA/CASH program in our area and the medical deduction is available on their 17 tax return and should cancel out any tax liability from using their IRA investment funds used to cover this expense. This wasn't going to be continued in the new tax law, but we lobbied to not have it eliminated for this exact reason.
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surprise Jan 1, 2018
My CPA firm is one of the top in a major city and we use one of the partners. He says that since medical signing off is required to live in a Memory Care, 100% of MC is deductible as medical expense. If certain Activities of Daily Life expenses are charged separately, then you need a statement from the doc that those are required because your patient lacks the capacity for that ADL. For example, when we first moved mthr in, there was a separate $100 charge for laundry. We had the MD sign a note before the end of the year that because of her medical condition, housekeeping services were required including laundry. We also asked the MC to please wrap all her charges into one line item on the invoice.
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Mary9999 Jan 1, 2018
My sister was in hospice care for 16 months before she died in September from emphysema. She needed 24/7 care, which I provided for a year before I had to move her to a board and care home, with round the clock caregivers, and hospice care for her meds, advice, personal care like bathing, etc. (Being a one-person care giver 24/7 was too stressful for me and was impacting my own health, mental and physical.)  She was mostly bedridden, could not walk more than several yards using a walker, and eventually became totally bedridden.  

I paid the board and care cost from her pension income every month, as I was a signer on her account. The cost was significant, and now I'm planning to file her tax return for 2017. I'm very confused as to whether I can deduct all the costs, or part of the costs, as a medical expense. The expense for the 10 months she was living there took all of her pension income plus money from her savings account, so it will be way over the 7.5% of her Adjusted Gross Income. This would be her only deduction. It will be a simple 1040 with Schedule A. I would appreciate any advice. Thank you!
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JohnnyJ Jan 1, 2018
My friend's tax preparer deducts all my friend's memory care costs, which far exceed his income, so everything withheld during the year comes back. It just about makes one month's payment. And I can freely withdraw from his IRA and not worry about the tax consequences since it will all come back in the spring. That's one less thing for me to worry about as his POA.
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wi57twin Jan 1, 2018
My husband is a cpa and does my dad’s taxes. We deduct all of dad’s memory care expenses on his taxes.
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Harpcat Jan 1, 2018
It seems CPAs are all over the place in this. My dad is in AL and last year the facility could not separate out medical vs non medical expenses. So my CPA took a portion as deductible. Ginach, I wish we had deducted the entire amount last year. I will ask her about it this year.
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Ginach Jan 1, 2018
My accountant who also handled my dad’s taxes said that the entire assisted living monthly payments were valid medical expenses because my dad had a written assessment signed by his doctor that stated that my dad needed that level of care.
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CTTN55 Dec 29, 2017
Thanks for clarifying, thay90. So they kept it at 7.5% for those over 65 for 2017 (after raising it to 10% for everyone else) until January 1, 2017. And now the new tax law has lowered the threshold for everyone to 7.5% retroactively to January 1, 2017. Confusing!

(We have an accountant do our taxes, as we have a small business.)
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MACinCT Dec 28, 2017
The business office may have a document upon request that lists the % of the monthly rent that would be deductible. Don't forget insurance premiums and co pay
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