Deducting Long Term Care Expenses - Assisted Living

[RWG1950]

I struggle with this issue every year. My client base is getting older & some of my elders are now in assisted living facilities - but not nursing homes.
Some of these people (with dementia onset) can still perform most (but not necessarily all) of the 6 ADL's but require supervision. Most can no longer drive.
The monthly cost of these assisted facilities vary, but a nice one in my area can run $8 to12-K per month - depending on the level of care they receive.
As I understand it, to be deductible as a medical expense, a taxpayer in a facility must be receiving some sort of medical treatment or be chronically ill.
I'm wondering how other preparers interpret this issue & how they handle such assisted living expenses on a return.
Thanks for comments.

[New York Enrolled Agent]

I struggle with this issue every year. My client base is getting older & some of my elders are now in assisted living facilities - but not nursing homes.
Some of these people (with dementia onset) can still perform most (but not necessarily all) of the 6 ADL's but require supervision. Most can no longer drive.
The monthly cost of these assisted facilities vary, but a nice one in my area can run $8 to12-K per month - depending on the level of care they receive.
As I understand it, to be deductible as a medical expense, a taxpayer in a facility must be receiving some sort of medical treatment or be chronically ill.
I'm wondering how other preparers interpret this issue & how they handle such assisted living expenses on a return.
Thanks for comments.

The answer requires the taxpayer be chronically ill. The IRC at section 7702B provides the definition. Does your taxpayer qualify? [emphasis added]

(2) Chronically ill individual

(A) In general. The term "chronically ill individual" means any individual who has been certified by a licensed health care practitioner as -

(i) being unable to perform (without substantial assistance from another individual) at least 2 activities of daily living for a period of at least 90 days due to a loss of functional capacity,

(ii) having a level of disability similar (as determined under regulations prescribed by the Secretary in consultation with the Secretary of Health and Human Services) to the level of disability described in clause (i), or

(iii) requiring substantial supervision to protect such individual from threats to health and safety due to severe cognitive impairment.

Such term shall not include any individual otherwise meeting the requirements of the preceding sentence unless within the preceding 12-month period a licensed health care practitioner has certified that such individual meets such requirements.

(B) Activities of daily living. For purposes of subparagraph (A), each of the following is an activity of daily living:

(i) Eating.

(ii) Toileting.

(iii) Transferring.

(iv) Bathing.

(v) Dressing.

(vi) Continence.

[Uncle Sam]

In addition to what's been mentioned in the prior post, can you have your client obtain from the living facility a breakdown of the pertinent medical expenses - in either a specific dollar amount or a percent of total, to more clearly identify medical from non-medical expenses? Or some cover letter on its letterhead notifying your client of how to calculate such information.

[FEDUKE404]

In addition to what's been mentioned in the prior post, can you have your client obtain from the living facility a breakdown of the pertinent medical expenses - in either a specific dollar amount or a percent of total, to more clearly identify medical from non-medical expenses? Or some cover letter on its letterhead notifying your client of how to calculate such information.

I have seen such statements with a cost breakdown for residents of a long-term care facility. OTOH, I have also seen statements along the lines of "it is our belief that for Mrs. Jones ALL costs associated with living in our facility may be treated as medical costs."

Statements vary. . .