Deducting LTC expenses on schedule "A"

[RWG1950]

My elderly customer has been living in an assisted living facility for some time but had been able to take care of herself.
Near the end of 2019 (October) she suffered stroke-like medical issues & became chronically ill.
She needed ongoing daily nursing care (triggering her LTC policy benefits) but remained in her apartment.
Her LTC insurance policy is now in claim, but had a 90 day elimination period - so the 1st 3 mos of expenses were paid by her.
I'm aware that such of pocket nursing & related expenses would normally be 2019 schedule "A" medical deductions.
My question is - will the rent she had paid to the assisted facility (since qualifying as chronic) also count as a medical expense ?
Thanks for comments.

[Burke]

I would contact the assisted living facility for a determination of eligible deductible rental expenses. They usually issue a letter to residents indicating the percentage of the paid rental expenses that can be attributable to medical care. I used to get these every year for my A/L clients. Now if she was classified as in independent living, probably not. There are usually 3 levels of care, independent (0), assisted living, (%) and nursing care (100%). If she is actually in assisted living, she should have been able to deduct this in prior years.

[TAXNJ]

You should reference if the information below applies to your scenario.

Note, generally, only the medical component of assisted living costs is deductible and ordinary living costs like room and board are not.

If the resident is chronically ill and in the facility primarily for medical care and the care is being performed according to a certified care plan, then the room and board might be considered part of the medical care and the cost may be deductible.

Costs are deductible only to a limited extent if the resident is in the assisted living facility for custodial but not medical care. It should be noted that the expenses are not deductible if they are reimbursed by insurance or any other programs.


See TTB 4-6

Lodging Expenses for Medical Care

The cost of meals and lodging at a hospital or similar institution is deductible if the principal reason for being there is to receive medical care. See Nursing Home, page 4-7.

Lodging not provided in a hospital or similar institution (such as in a hotel) is deductible up to $50 per night per person, including someone traveling with the person receiving medical care. No deduction is allowed for meals. Deductible lodging expenses must meet all the following requirements.

• The lodging is primarily for and essential to medical care,

• The medical care is provided by a doctor in a licensed hospital or in a medical care facility related to, or the equivalent of, a licensed hospital,

• The lodging is not lavish or extravagant under the circumstances, and....

See TTB 4-7

Nursing Home

The cost of living in a nursing home, home for the aged, or similar institution, including meals and lodging, is deductible if a principal reason for being there is to get medical care. If the taxpayer is in a facility for personal reasons, only the part of the cost that is for medical or nursing care is deductible.



Also, see IRS Pub 502 medical expenses

[RWG1950]

My experience & understanding of "assisted living facilities" is that the taxpayer simply lives in their own apartment within the facility but has meals provided in a central dining room and possibly also gets some light housekeeping performed but otherwise they are on their own in every other way. As such it seems this is custodial & not medical - so not deductible.
This was the case before the stroke my customer experienced.
Its when the person becomes a chronic & begins to have home nursing care as provided by their LTC insurance coverage that the lines begin to blur for me.
If the care costs (if in a skilled facility - which would include the room), are reimbursed by LTC ins they would qualify as tax free - if under a qualified policy.
So I was wondering if the rent portion of care, if needing nursing care but not in a skilled facility would also count same as in a facility - but be deductible .

[TAXNJ]

My experience & understanding of "assisted living facilities" is that the taxpayer simply lives in their own apartment within the facility but has meals provided in a central dining room and possibly also gets some light housekeeping performed but otherwise they are on their own in every other way. As such it seems this is custodial & not medical - so not deductible.
This was the case before the stroke my customer experienced.
Its when the person becomes a chronic & begins to have home nursing care as provided by their LTC insurance coverage that the lines begin to blur for me.
If the care costs (if in a skilled facility - which would include the room), are reimbursed by LTC ins they would qualify as tax free - if under a qualified policy.
So I was wondering if the rent portion of care, if needing nursing care but not in a skilled facility would also count same as in a facility - but be deductible .

What specifically type of place do you mean when you say “So I was wondering if the rent portion of care, if needing nursing care but not in a skilled facility would also count same as in a facility - but be deductible .”?

Suggest reading TTB tab 4 & IRS pub 502 that should address those areas you mention especially tab 4-7 as applies.

After reading, specially what area(s) in the references do you still not understand?

[New York Enrolled Agent]

My elderly customer has been living in an assisted living facility for some time but had been able to take care of herself.
Near the end of 2019 (October) she suffered stroke-like medical issues & became chronically ill.

My question is - will the rent she had paid to the assisted facility (since qualifying as chronic) also count as a medical expense ?
Thanks for comments.

I think the key is "chronically ill". IRC 213(d)(1) says medical care includes "qualified long term care services".

You need to go to § 7702B for the definition of QLTCS. I'm only pasting a snip - you need to read the entire relevant portion.

(c) Qualified long-term care services

For purposes of this section -

(1) In general

The term "qualified long-term care services" means necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, and rehabilitative services, and maintenance or personal care services, which -

(A) are required by a chronically ill individual, and

(B) are provided pursuant to a plan of care prescribed by a licensed health care practitioner.

If your taxpayer satisfies the conditions of 7702B then the entire cost of the facility would be eligible for §213. If not, then I believe Reg §1.213-1(e)(1)(v) would prohibit the rent" cost

[Burke]

To RWG1950: Does your client reside in a Life Care Facility? This is one where you pay a large entrance fee up front, and thereafter you progress from independent, assisted and or nursing care with no change in monthly fees. Although some go to assisted living classification from the get-go.

[Lion]

TTB 4-6 Lodging Expenses for Medical Care & 4-7 Nursing Home

[TAXNJ]

TTB 4-6 Lodging Expenses for Medical Care & 4-7 Nursing Home

See Earlier reply post above. Think Original Poster has enough information since no further posting?