Independent Living Facility and NON-Qualified Long Term Care Benefits

[mammondee]

Thank you in advance for any insight you can provide on this topic.

The taxpayer and spouse are living in an "Independent Living" facility. The monthly statement from the facility shows "Rent $4,000 + 2nd Person $575 + Parking $25 = total $4,600. This covers room and board.

The facts from the Plan of Care are as follows:
1. The taxpayer is Dependent for all daily living skills except Eating
2. The taxpayer has been put on and off of a feeding tube since the Plan of Care.
3. The taxpayer has Qualifying Cognitive Impairment

The couple has a Non-Qualified Long Term Care policy that is paying them a per diem of $212 a day.

The facility will not provide any kind of help as to what portion of the room and board is for "Medical" needs. Of course, they say that is the tax accountant job!

Any thoughts on how much of the monthly statement could be considered tax-deductible?

[Maribeth]

I'd deduct it all. Your client is chronically ill and unable to perform at least 2 of the daily living activities. (less the LTC per diem, of course)

[FEDUKE404]

With the facts given, I'm confused as to how you can call the facility an "independent living facility." It sounds much more like an "assisted living facility."

For the former, there is generally little to be considered "medical" in scope. For the latter, especially in later stages of life / cognitive ability, by definition virtually all expenses are deemed "medical."

I do see a problem as relates to a H/W (who drives the car?). A reasonable approach might be to track the one-person costs.

FWIW, it's been my experience that even "retirement facilities" frequently generate some doggone good annual tax statements showing the portion of fees that is allocated to clinics, nurse care, et al.