CCRC Life care entrance fee

Forum|Forum|2 years ago
December 9, 2023
1 reply
14 views

I will move to a Continuing Care Retirement Community in 2024. I understand the treatment of a portion of the entrance fee as life care advance payment, as specified in IRS PUB 202. I paid the entrance fee in 2022 and 2023 as a place holder that was fully refundable up until move-in. The facility has assigned me a move-in date in 2024. Can I treat the life care advance payment as paid in 2024 since it was refundable until then and no services were available prior to move-in?

Deduction

Anonymous_

Level 15

https://ttlc.intuit.com/community/tax-credits-deductions/discussion/one-time-medical-deduction-for-ccrc-entrance-fee-over-two-years/00/1825270

TomK2023

Level 15

No. You can only take this medical expense one time in the year that it was taken. Thus, you should choose which year is most advantageous to your tax situation: 2022 or 2023.

"You can include in medical expenses a part of a life-care fee or “founder's fee” you pay either monthly or as a lump sum under an agreement with a retirement home. The part of the payment you include is the amount properly allocable to medical care. The agreement must require that you pay a specific fee as a condition for the home's promise to provide lifetime care that includes medical care. You can use a statement from the retirement home to prove the amount properly allocable to medical care. The statement must be based either on the home's prior experience or on information from a comparable home."

IRS Pub. 502 - Page 10

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