Home-Handicapped Modifications
Generally, home improvements are not deductible except to offset home gain when the home is sold. But a medical expense deduction may be claimed when a medically-necessary home improvement is made, such as a lift or elevator for a handicapped person or a therapy spa for an arthritis sufferer. The cost of such an expense is deductible as a medical expense to the extent it exceeds any resulting increase in the value of the property.
For example, if a qualifying improvement costing $5,000 increases the value of a home by $2,000, the medical expense is $3,000. The full cost of certain improvements can be included as medical expenses, because they are considered not to increase the home’s value.
Examples of these types of improvements include constructing entrance or exit ramps for the home; widening entrance/exit doorways, hallways and interior doorways; installing railings and support bars; and lowering or modifying kitchen cabinets. Note, however, that medical expenses can be claimed on Schedule A, Form 1040, only to the extent that they exceed 7.5% of the taxpayer’s adjusted gross income (AGI) (10% if taxed by the AMT).
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Disclaimer: The tax advice included in this newsletter is an overview of some complex tax rules and is not intended as a thorough in-depth analysis of the tax issues discussed. Do not act on the information included in this newsletter without first determining how these issues apply to your particular set of circumstances and if there are any special tax laws or regulations that might apply to your situation.
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