Medically necessary itemized deduction

[TaxLadyinPA]

Paid medical total costs are $ 25,000

Client has actually paid it all ...
it is all legal medical deductions so I'm not concerned about that , however ...

my question is ....

she is fighting with the insurance company for a reimbursement which will total approx. $ 10,000

if she gets this in 2008 do I have to amend the 2007 return or do I claim the $ 10,000 on the 2008 return as "other income" ?


thanks for your wise answers

[Gene V]

From WebCD

What If You Receive Insurance
Reimbursement in a Later Year?

If you are reimbursed in a later year for medical expenses
you deducted in an earlier year, you generally must report
the reimbursement as income up to the amount you previously
deducted as medical expenses.

However, you do not report as income the amount of
reimbursement you received up to the amount of your
medical deductions that did not reduce your tax for the
earlier year.

For more information about the recovery of an amount
that you claimed as an itemized deduction in an earlier
year, see Recoveries in Publication 525, Taxable and
Nontaxable Income.
Publication 502 (2007) Page 19