Medical Dependency Doublespeak

[Snaggletooth]

Every week the NATP has a "stump the band" question. Here is this week's question:

Your client paid the medical expenses of her father in 2008. The taxpayer's father is not a dependent because his gross income in 2008 was $7,000. Is the taxpayer allowed to deduct the medical expenses she paid on behalf of her father on her 2008 tax return?

In order to deduct medical expenses, the recipient party MUST be your dependent. But the answer is "Yes" because for purposes of being a "medical" dependent the following three dependency qualifications are thrown out:

(i) Anyone who has dependents cannot be a dependent themself.
(ii) A MFJ taxpayer cannot be a dependent.
(iii) Gross income cannot be more than the dependency amount.

Tax instructions would be clearer if the words "dependent" were not even used, than to invoke this special waiver of dependency rules.

But my question, with respect to (iii) above, does this mean that there is no limit to how much $$ a relative can make beyond which he cannot be a medical dependent? From the above, it appears not...

[erchess]

The big problem I am aware of

is that the payer of the Medical Expenses must have paid one dollar more than half of the other person's total support for the year. I have the NATP email you got but have not read it and I didn't notice that question being answered in the question as you posed it.

Also, Snags, when did your i and ii come in? They escaped my notice and there was a time when your iii was the only exception unless I just misunderstood.

[BP.]

. . . the payer of the Medical Expenses must have paid one dollar more than half of the other person's total support for the year.

Exceptions- multiple support agreement or child of div/separated parents. Since the original question involved the expenses of a taxpayer's father, multiple support agreement could be a factor.

Also, Snags, when did your i and ii come in?

Listed in TTB p. 4-5, & in Pub 17, p. 137.

[BP.]

Tax instructions would be clearer if the words "dependent" were not even used

You are right, and even the phrase "Qualifying Relative" is used regarding medical expenses, with all of its dependency tests, except the gross income test.

[Snaggletooth]

Erchess

Not sure I understand the question, except that I paraphrased the three items for brevity. The NATP publication actually presented them with cites:

(i) Code § 152(b)(1)
(ii) Code § 152(b)(2)
(iii) Code § 152(d)(1)(B)

if you were asking about the relevance of (i) and (ii), I don't they are as germane to the subject as is (iii), but were simply presented because they are also waived qualifiers.