Tax questions

March 26, 2000

Members of the Maryland Association of Certified Public Accountants are answering readers' tax questions through April 15.

Is the money that we spend for an assisted-living nursing home deductible?

There is no hard and fast rule as to the deductibility of nursing home costs. The deduction will depend on the nature of the services provided, rather than the institution that provides the service. If the reason that the person is in a nursing home is that his or her medical condition requires the availability of medical care, and meals and lodging are furnished as part of that care, the entire amount is deductible. For example, the cost of institutional care for a mentally ill person who cannot be safely left alone is deductible as a medical expense.

If the care does not meet the above test, there will still be a medical deduction available for the portion of the cost incurred that directly relates to the medical services provided. Most nursing homes and assisted living facilities will provide you with an approximate allocation or percentage of overall cost that can be attributed to medical expenses.

Medical expenses are deductible only if the taxpayer were to itemize deductions. Also, the amount of all medical expenses are reduced by 7.5 percent of adjusted gross income before being added to all other itemized deductions. The amount of deductions is then compared with the standard deduction to determine if it is appropriate to itemize. Also, itemized deductions are reduced as adjusted gross income exceeds certain amounts.

Sheldon J. Berman, CPA,

Rosen, Sapperstein & Friedlander, Chartered

The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary.

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