Can an expensive lift or small elevator be a medical expense?

[gmwgww]

HOUSE IS VERY SMALL AND THIS ELEVATOR TAKES UP SPACE AS IT IS A CYLINDER TUBE GOING FROM ONE FLOOR TO THE OTHER.  I CANNOT SEE HOW IT COULD INCREASE THE VALUE OF THE HOME.  THE REAL ESTATE SALES PERSON'S OPINION IS SOMEONE ELSE WOULD PROBABLY REMOVE IT.

MY HUSBAND CANNOT CLIMB THE STAIRS.

[Patrice · Accepted solution]

Ordinarily, you cannot deduct the cost of permanent improvements to your home. However, there is an exception: These costs can be tax deductible as medical expenses if their main purpose is medical care for you, your spouse, or your dependents.

But, such expenses are deductible only if you itemize your deductions and only to the extent they exceed 10% of your adjusted gross income for the year (7.5% if you're 65 or over). Moreover, the cost of the improvement must be reduced by the amount it increases the value of your property. If the value of your property is not increased by the improvement, the entire cost can be included as a medical expense.

Among the expenses that can be deductible are improvements to make your home wheelchair accessible or to make it easier for a disabled person to get around the home, including:

• constructing entrance or exit ramps for your home
• widening doorways at entrances or exits to your home
• widening or otherwise modifying hallways and interior doorways
• installing railings, support bars, or other modifications to bathrooms
• lowering or modifying kitchen cabinets and equipment
• moving or modifying electrical outlets and fixtures
• installing porch lifts and other forms of lifts
• modifying fire alarms, smoke detectors, and other warning systems
• modifying stairways
• adding handrails or grab bars anywhere (whether or not in bathrooms).
• modifying hardware on doors
• modifying areas in front of entrance and exit doorways, and
• grading the ground to provide access to the residence.

Improvements such as these are not considered to add value to your home and are fully deductible as medical expenses.

Other improvements that do add value to your home can be deductible as well--for example, installing an elevator so that a disabled person does not have to use stairs, or installing a new bathroom on the ground floor of your home to avoid having to use stairs. Improvements such as these increase the value of your property, and may be deducted only to the extent they exceed the increase in the home value caused by the improvement.

Example: You have a heart ailment. On your doctor's advice, you install an elevator in your home so that you will not have to climb stairs. The elevator costs $8,000. An appraisal shows that the elevator increases the value of your home by $4,400. You may deduct $3,600 of the $8,000 expense as a medical deduction.

[schroeremily3]

Just curious - why is it that an elevator or additional bathroom would not be considered a fully deductible accessibility improvement? Say a resident lives in a home where the only bathroom is on the second floor, and he becomes paralyzed. Would an elevator or bathroom addition be deemed medically necessary and thereby fully deductible in that instance, or are there other improvements that should be implemented instead (chairlifts, etc)?

[--zimmermanohio]

My wife has Lumbar Degenerative Disc Disease.  It has progressed and she no longer can use the stairs in our two story home.   Dr.Gossard has issued an Rx for an elevator.  I use Turbo Tax to complete my Fed taxes and want to include the elevator expense in the 2021 taxes.   I understand the rules but don't know what forms a will be needed to satisfy the IRS.

[Opus 17]

@--zimmermanohio 

you don’t send any proof with your tax return. Keep documents for at least three years in case of audit. What you will need is to prove the two parts of the medical expense deduction for home improvement.

1. The improvement was medically necessary.

2. The improvement did not increase the value of your home.  

(Improvements that increase the value of your home are treated as adjustments to cost basis. They are not deductible medical expenses at the time you pay them, but they might reduce the capital gains tax that you will owe when you sell the home.)

To show that the improvement did not increase the value of your home, you might think about getting a real estate appraisal, or an affidavit from an expert appraiser discussing the value of medical improvements, or you might do your own investigation of your local real estate market to see if you can find a similar homes with and without an elevator that sold for the same price.

[rogue18]

Hello,

We just had a Stiltz Duo Alta "elevator" installed due to my wife's knee issues. Her surgeon provided a note stating it was necessary.

This product does not require construction permits to install, is free standing and can be relocated with us us should we decide to move. 

Because it is removable my sense is that it would not add value to the house from an adjusted basis standpoint and thus is fully deductible

Thoughts?

Chris

[TeresaM]

If it is a temporary installation and not a permanent fixture in the home, it does sound that it could not be considered to increase the value of the home. 

The IRS says about installations at your home:

You can include in medical expenses amounts you pay for special equipment installed in a home, or for improvements, if their main purpose is medical care for you, your spouse, or your dependent. The cost of permanent improvements that increase the value of your property may be partly included as a medical expense. The cost of the improvement is reduced by the increase in the value of your property. The difference is a medical expense. If the value of your property isn't increased by the improvement, the entire cost is included as a medical expense.