it doesn't do calculations of medical expenses vs personal. Rather, you generally get a letter or other notification as to the amount of payments for the year that constitute deductible medical expenses. Once the amount is know it is handled just like any other medical expense.
Residents of Continuing Care Retirement Communities (CCRCs) may be eligible for tax deductions on prepaid medical expenses. This typically includes a portion of the entrance fee and monthly fees that can be classified as prepaid medical expenses under IRS guidelines.
Eligibility for Deductions
Only residents of CCRCs that offer a continuum of care can qualify for these deductions. If the community does not provide guaranteed health care services, the fees may not be deductible
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A nonrefundable portion of the entrance fee is often considered a prepaid medical expense, while refundable portions may only qualify for deductions if they are nonrefundable
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Claiming the Deductions
Residents should report these deductions under medical expenses when filing taxes
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It is advisable to keep detailed records of all fees paid and consult with a tax professional for personalized advice
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