Medical expense reimbursement and sharing organizations

[guruofgentoo]

If I am a member of a health care sharing organization, I receive gifts directly from other members to help with medical expenses. I had a lot of medical expenses last year, and I am wondering if these gifts would constitute reimbursement (even though they are just small monetary gifts from other people). If they are reimbursement as described in the medical expense section of deductions, I cannot deduct the expenses. But, if reimbursements relates only to insurance, retirement plan, employer, etc. then these would be deductible in that section.

I would appreciate some clarity on this situation.

[MargaretL]

I have added a note.. please read just in case it relates to you as well..

[MargaretL · Accepted solution]

That is a very good question...The IRS has no clear guidance on the medical expenses and whether they are or they are not tax deductible. However, payments you receive form other members are considered gifts and gifts are tax free. Therefore, since it is a gift and not a reimbursement, the expenses should be deductible as your medical expenses.

I found this article which talks about this... some of the members were audited and the IRS did validate the deductions as medical expenses; while it is not an official source, it confirms my "logic":

http://samaritanministriesreview.com/tax-details/

NOTE: you are not asking about this, but I thought I will add it anyway... you cannot deduct your "monthly" payments that you make to the organization, they are not deductible as your medical premiums nor are they deductible as your charitable donations.  Only the amount above the required minimum can be deducted as charitable donation.