Am I to believe this?

[DMICPA]

I have been in business thirty eight years. I have a client who is 70 years young and was a very sharp executive. In the last couple of years the client has been losing his mental abilities and now for 2013 had been diagnosed with advanced dementia or Alzheimer's. This is a very sad situation. The client is in a locked facility and requires 24 hour a day care. I have been personally involved and have overseen the treatment and the facilities that the client is in. The monthly charge is $5,100. Now the client does not even know me.

The Facility has just sent me the "medical" portion they estimate is for medical care and it is 33% of the amount paid. Are you kidding? The entire amount is certainly deductible as medical as the client cannot do the basic living activities and has to be watched 24/7.

The client has spent $61,200 in this locked facility. I have a letter from a Medical Director of Aging that states the client is in advance dementia and can no longer care for himself and the condition is fatal.

Would anyone deduct just 33% of the costs? This is clearly a medical deduction at 100%. I have taken this position in the past with similar clients and have been audited by the IRS on this issue and they also agreed that this is clearly a 100% deductible.

Should I write the Chief Financial Officer of the facility and scold her? Should I just laugh and take the entire deduction?

How could any rational person come up with just 33%?

Am I losing it?

Confused and dazed.

[Roberts]

" I have a letter from a Medical Director of Aging that states the client is in advance dementia and can no longer care for himself and the condition is fatal."

All deductible w/ this letter.


IRS instructions:

If you, your spouse, or your dependent is in a nursing home, and the primary reason for being there is for medical care, the entire cost, including meals and lodging, is a deductible medical expense.
If the individual is in the home mainly for personal reasons, then only the cost of the actual medical care is a deductible medical expense, and the cost of the meals and lodging is not deductible.

[JohnH]

I think a call or letter to the facility would be in order. Maybe they use the 33% as an overall average if the facility houses a broad range of residents.

I agree with you that if he has an Alzheimers diagnosis, then virtually everything other than personal grooming and a few other incidentals is deductible as medical expense. Maybe you should give the facility copies of the IRS qualifications for deducting the full amount. You might be helping them to give out more accurate info and also indirectly help many others who deserve the full deduction.

In any event, I'd deduct all, or nearly all, of the $6K. It might be worth getting a transcript of account charges, just to see if there are any small items which need to be excluded. That attention to detail might be very helpful if an audit occurs.

[DMICPA]

ha ha

I did call a facility once on this. It was another Dementia patient. They immediately got ruffled and said they don't give tax advice. If they don't I asked them why did they say only a certain % was deductible. The administrator would not respond to the question and hung up.

This current facility replied that they are familiar with accounting and tax but will not verify or back up anything. Why do they send the letters?

The reason this gets to me is that it is not a big or any tax difference for this person because their income is gone for 2013. I get mad because here is someone who is obviously disabled and his life will be cut short and there is no cure and they are in a locked facility and the administration just does not help the situation at all. It is one of the Scottish Rite facilities. they may not know what they are doing issuing these bogus numbers but they won't listen to anyone. Not right but never in doubt.

[JohnH]

Maybe it's because they have so few private-pay patients that they seldom get questions of this type. But one would think they would want to know as much as possible, since they are sending out those letters. I agree with you - they are clueless.

I had a situation with a Skilled Nursing Facility a few years ago when a relative with dementia was living there. But they were cooperative - I gave them a certification I had drawn up with a request that their physician sign it. They arranged for me to meet him when he was on site, and after I explained everything he and the administrator signed off with no questions. They also asked me to give them a blank copy of the certification just in case any other patients needed it. I don't know if they ever used it - patient confidentiality and all that stuff...

[geekgirldany]

I found this website with some good info:

http://www.memorycareliving.com/article-taxdeduct.html

They talk like some alzehimers facilities advertise they are assisted living not providing medical care. So maybe this is their reasoning??

[Jiggers]

Check out this article:

http://www.elderlawanswers.com/tax-deductions-for-assisted-living-costs-7184

Good guidelines on being able to deduct the full assisted living expenses.

Most doctors and nursing homes will comply with providing what is needed to be able to deduct the expense.