Special medical expenses

[JG EA]

A local bank set up an account for a special operation for a local child. The gifts from the public will go into this account with the parent's SS#. The parent asked me the question could the people giving money count as a charitable contribution?

I answered no and explained why, and went on to say that since they were gifts they could then be counted by the parent as medical expense when used for the operation. Now, I am second guessing. Is there anything out there about such an account? Can the parent truly claim as a medical expense?

[erchess]

I don't have a ciite

but I would be caught claiming the medical expenses for the parent unless the right steps had been taken to enable the donors to claim charitable contributions.

[DaveO]

The donee's basis of a gift

Is the donor's basis. Since the donor isn't allowed a deduction, and cash has its own basis wouldn't the donee have a deduction? I don't have any cite either but it would seem so.

[Burke]

I agree. The cash is a gift to the recipient. She can then use the funds for whatever she wishes. Including deductible medical expenses for a qualifying dependent child. Of course, there is no charitable deduction available to the donor(s.) The donor should understand that there is no legal obligation for the $$ to be used for the purpose they originally intended it. However, there was a case recently where it was determined the mother used the funds for her personal use and there was no real medical need involving her child, and I believe she was either sued or charged with fraud.

[dodgedipduck]

A charitable contribution can't be for the benefit of any individual, so charitable is out.

I agree that the mom can deduct medical expenses paid. Paying with gifted funds doesn't change the rules for deduction.

[JG EA]

Thanks to the reassuring replies.

I remembered some discussion on this board but couldn't find it again. But, I had a nagging thought that there was something specific about these types of collections for needy people.

Pub 17 pg 165 is one point that seems to apply in a very roundabout way: gifts to disaster relief victims does not reduce their casualty loss.

Thanks again.