Home Improvement for Medical Reason
Can I deduct expenses incurred for changes made to prevent falls in the bathroom and for installing sensor alarms to monitor a dementia patient who is walking out?
Can I deduct expenses incurred for changes made to prevent falls in the bathroom and for installing sensor alarms to monitor a dementia patient who is walking out?
Yes, mostly.
Generally, capital improvements (permanent changes to your home) are not deductible, but add to the cost basis of the home and may reduce your capital gains when you sell. However, some improvements made for medical necessity do not actually increase the value of the home. In that case, they are allowable as medical expense deductions, subject to the usual 7.5% limitation. The changes you mention would qualify for a deduction based on the instructions in publication 502. If you deduct them as medical expenses, you can't also use them as cost basis adjustments when (if) you sell.
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