accident his legs. 7-68 Last year, Mr. Smith was involved in an automobile . Smi
ID: 2555541 • Letter: A
Question
accident his legs. 7-68 Last year, Mr. Smith was involved in an automobile . Smith was involved in an automobile accident, severely injuring part of a long-term rehabilitation process, his physcian prescribes a daily routine of swimming. Because there is no readily available public facility nearby, Smith investigates ity of either building a pool in his own back yard or purchasing another home with a pool. In the current year he finds a new home with a pool and purchases it for $175,000. He then obtains some estimates and finds that it would cost approximately $20,000 to replace the pool in the home he has just purchased. He also obtains some real Is, which indicate that the existing pool increases the value of the home by only $8,000. During the current year, Smith also expends $500 in maintaining the pool and $1,800 in other medical expenses. What is the total amount of medical expenses he the possibil may claim in the current year? Smith's AGI for the year is $60,000. Sec. 213 . Reg. Sec. 1.213-1(e)(1) (ii) . Richard A. Polacsek, 1981 PH ?.?. Memo T8 1,569, 42 TCM 1289 Paul A.Lerew, 1982 PH T.C. Memo 982,483, 44 TCM 918 . Jacob H. Robbins, 1982 PH ?.?. Memo T82,565, 44 TCM 1254Explanation / Answer
Medical Expenses are allowed only if assessee itemize his expenses and medical expenses are more than 10% of AGI.
In actual words of law :
There shall be allowed as a deduction the expenses paid during the taxable year, not compensated for by insurance or otherwise, for medical care of the taxpayer, his spouse, or a dependent (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof), to the extent that such expenses exceed 10 percent of adjusted gross income.
Since here, allowable expenses are of $ 1800 and $ 500 which is $ 2300. This is not more than 10% of $ 60000 = $ 6000. Thus no expenses would be allowed.
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