Is mold remediation, associated home repairs and a drainage system viewed as mitigation of a health issue for a sick family member and deductible?

[chirajay]

A family member had been sick for quite a while. After having some medical tests, we hired a company to test the air quality in our home and found that there was toxic mold in our home that was making the person sick.  We needed to remediate the mold, make repairs to our home and put in a drainage system to resolve the problem.  Are we able to claim the cost to test the air quality, home repairs and the drainage system as deductible expenses?

[Coleen3 · Accepted solution]

Yes. They could be considered medical expenses but read how to treat capital improvements below. While the IRS doesn't directly address mold, they do address lead paint. That could be a model for how you go about deducting the expense.

Capital Expenses

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.

Certain improvements made to accommodate a home to your disabled condition, or that of your spouse or your dependents who live with you, don't usually increase the value of the home and the cost can be included in full as medical expenses. These improvements include, but aren't limited to, the following items.

• 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 (but elevators generally add value to the house).

• 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.

• Grading the ground to provide access to the residence.

Only reasonable costs to accommodate a home to your disabled condition are considered medical care. Additional costs for personal motives, such as for architectural or aesthetic reasons, aren't medical expenses.

Capital expense worksheet.

Use Worksheet A to figure the amount of your capital expense to include in your medical expenses.

Lead-Based Paint Removal

You can include in medical expenses the cost of removing lead-based paints from surfaces in your home to prevent a child who has or had lead poisoning from eating the paint. These surfaces must be in poor repair (peeling or cracking) or within the child's reach. The cost of repainting the scraped area isn't a medical expense.

If, instead of removing the paint, you cover the area with wallboard or paneling, treat these items as capital expenses. See Capital Expenses , earlier. Don't include the cost of painting the wallboard as a medical expense

[uwrgtriangle]

<p>Mold remediation, home repairs, and drainage systems may be considered medical deductions if they are directly related to treating a diagnosed health condition. The IRS requires proof that these expenses are medically necessary and not just home improvements. Doctor recommendation and proper documentation are essential. Consulting a tax professional can clarify eligibility.</p>

[KrisD15]

In order to deduct medical expenses of that nature, have something in writing from a medical professional indicating that the repair is necessary for the health of an individual. 

Qualified Environmental Remediation expense may also be expensed for business and/or rental property.