Medical expense - elderly client

[KJ Judd]

My client's wife has in home care (Home Instead). My understanding is it is companion care with some nursing (help showering, etc.). Long term care policy pays 75%, my client pays 25%.

TTB p. 4-7, qualified long term care services are deductible. "maintenance and personal care services that are required by a chronically ill individual and provided pursuant to a plan of care by a licensed health care practitioner." Is companion care considered "personal care services"? I can't find more detail on the definition.

Also, wife needs Depends (adult diapers) for her condition. Are these deductible? My initial thought is not deductible personal care item. However, p. 4-5, diaper service is not deductible unless needed to relieve effects of particular disease.

[Brad Imsdahl]

The problem with trying to answer a question like this is that there is not always a consistent use of terminology. What does “companion care” mean? TTB, page 4-4 says deductible medical expenses “are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments affecting any part or function of the body.”

Examples of medical expenses that are not deductible include diapers, “unless they are needed to relieve the effects of a particular disease,” and “household help, except for services described under Nursing Services – Nonprofessional on page 4-7.”

So is the companion care needed for the treatment of a disease, or is it household help for someone too old to do their own dishes?

Its kind of like the nursing home debate. Technically, if you enter a nursing home for custodial care, the expense is not deductible, except for specific costs associated with medical treatment. However, if you enter a nursing home for a medical reason, all of the cost, including custodial costs are deductible as medical expenses.

Where do you draw the line? Medical expenses are one of the more common litigated issues in tax law.