Research Problem 1. Jane suffers from a degenerative spinal disorder. Her physic
ID: 2798398 • Letter: R
Question
Research Problem 1. Jane suffers from a degenerative spinal disorder. Her physician said that swimming could help prevent the onset of permanent paralysis and reconm mended the installation of a swimming pool at her residence for her use. Jane's res dence had a market value of approximately $500,000 before the swimming pool was installed. The swimming pool was built, and an appraiser estimated that the value of Jane's home increased by $98,000 because of the addition. The pool cost $194,000, and Jane claimed a medical expense deduction of $96,000 ($194,000- $98,000) on her tax return. Upon audit of the return, the IRS determined that an adequate pool should have cost $70,000 and would increase the value of her home by only $31,000. Thus, the IRS claims that Jane is entitled to a deduction of only $39,000 ($70,000 $31,000). a. Is there any ceiling limitation on the amount deductible as a medical expense Explain. Can capital expenditures be deductible as medical expenses? Explain. What is the significance of a "minimum adequate facility"? Should aesthetic or ar chitectural qualities be considered in the determination? Why or why not b.Explanation / Answer
Answer:
1. If Total Medical Expense exceeds 10% of Annual Gross Income, then excess amount beyond limit may be deducted. In case, Gross Income is $ 100,000 the 10% is $10,000 and if your medical expense is $12,000 then $ 2000 is deducted.
2. A Medical Expense dictated by Medical Necessity may be deducted as a Medical Expense. This is not capitalized and depreciated but expensed in a year in which incurred.
3. Minimum Adequate facility is required minimum facility for medical necessity purpose. A minimum level of facility required for curing patient with safety and ease of maintainability must be considered. Beautification and modernisation expense for personal motivation must be kept out of the assessment of expense for tax purposes.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.