Q. If She is in the process of paying me back, does it still count as a gift? or Can she claim the deduction at this point?
A. Whether the money was a gift or a loan, she can still claim the deduction. She can claim only it in the year the bill was paid. For example, if you paid the bill in 2023 and she paid you back in 2024, she can only deduct the medical expense on her 2023 tax return, not 2024.
