CCRC Charitable deduction

[rbtwiles]

We moved into CCRC that is a 501(c)(3) not-for-profit corporation this year and paid an entrance fee that is 50% non-refundable and upgraded the cottage and added on an addition that is not considered in computing refunds.  Since the money is given to a not-for-profit corporation can it be shown as a charitable donation on the tax return.

[MaryK4]

No, to be a charitable contribution you would have to give the donation separate from the living arrangement transaction.  Your transaction with the CCRC is a commercial one, not a charitable one so you cannot take a charitable contribution for the payments that you are making (because you are getting something in return for your payments it is not a gift.)

Just because you pay a nonprofit money does not mean it is a donation.

[rbtwiles]

The upgrade to the cottage and the addition were two separate transactions occurring at later dates that had no effect on the previous living arrangements.  From your response to my previous question, it appears the costs of these two projects would be a charitable donation.

[JillS56]

There is not enough information in your question to properly respond to your question.  I have a few questions to understand exactly what you gave and how you gave it to the CCRC.

The main question not addressed here has the CCRC given you a letter that states any portion of the money you gave to the CCRC is a charitable donation?   If you believe that it should be a charitable donation, then go to the CCRC and ask them about your donation.   Only they can make the determination whether or not it is considered a 501(c)(3) donation that can be claimed on your taxes as a charitable donation.

@MaryK4 is correct that if you have a personal gain from the donation made to the CCRC, you cannot claim a charitable donation.    In other words, if the donation was specifically for your unit where it could be said that only you are personally gaining from the donation, you cannot claim it as a charitable donation.

If you can provide more details of the donations, we could give you more exact information.    I think you would be able to get a more direct answer as to the deductibility of the donation would be from the CCRC.

Another thought is since the CCRC is providing lifetime housing and health care services, can any portion of this be considered as medical expenses.  Again, only the CCRC can answer this question.

[rbtwiles]

We accept your response that there is no charitable contribution when we gain from the donation that is the cost is the construction.

Thanks for the information on medical expenses.  We received a letter from the CCRC that 7.91% of the monthly fees and entrance fee may constitute payment for medical expenses for our contract that is a fee-for-service plan.  This plan does not cover the costs of assisted living and nursing.  Are there any concern we should have in using this information since the letter stated it should not be interpreted as tax advice?   

[RobertB4444]

No, their figure is usable for a medical deduction.  A portion of the assisted living costs may also be deductible as a medical expense - you should look into that as well.

[BartruffD]

I have a similar situation and would like confirmation that the previous discussion applies.

A person moves into a single family home in a CCRC (501c(3)) community, paying an entry fee and a monthly fee determined by the size/location of the home.  Then, several years into the contract, the resident requests that the CCRC allow the addition of a room to the residence that is paid for by the resident.  No adjustment to the monthly payment is a part of the arrangement.  Ultimately, the resident will move to higher levels of care, leave the community with no refund, or die, with the home returning to the CCRC inventory to be marketed to future residents at a higher base fee due to the added room.

Can the resident who pays the CCRC for the construction of the room claim any part of the payment as a charitable deduction?

[DaveF1006]

If the resident requests the additional room to be constructed for his or her own benefit, the cost for the construction cannot be considered a charitable deduction.

@BartruffD