House modifications to adapt for senior citizen

[Tribhovan]

My 80+ year old mother plans to move in with us in early 2023. I have three major projects planned to make her living more comfortable. She will have dedicated space for her room and bath.

1) Remodel her bathroom (replace tub with shower-stall) etc. to be safe

2) Install chair-lift since all our bedrooms are on the upper floor (she had both knee replacement several years ago) 

3) build a balcony so that she has open space and access to garden etc.

Which ones of above expenses can I count on as eligible modifications to get a tax break? Will this require prior authorization from doctors' office? I understand a balcony is too far-fetch, but chair-lift and bathroom are legit age-based requirements. Anyone with similar experience?

[NCperson · Accepted solution]

first, even if you could get a deduction, it would have to be a medical deduction.... and those are only deductible where they exceed 7.5% of your AGI AND you itemize AND only if your mother is your dependent.*  if the total expense we are talking about don't meet these requirements or if your mother is not your dependent*, then forget the idea of a medical deduction.  That is all before even thinking that the projects you are undertaking can be deducted as medical expenses. 

best to read this IRS document and especially the section on Capital Improvements on page 6.  Basically, to the extend your projects increase the value of your home, those are capital improvments (and not medical expenses), the rest COULD BE medical expenses. 

https://www.irs.gov/pub/irs-pdf/p502.pdf

*and there is a twist, if she could be your dependent, other than her earnings (excluding social security) exceed $4300, then her medical expenses could be deducted on your tax return. 

[Tribhovan]

that link was very helpful, thank you 

[Mike9241]

all would seem to qualify but the issue is the reduction of the medical deduction for an increase in the value of your home. see bolded sentences.  you may want to consult a real estate appraiser to get their estimate of the value of your house before and after. This may be crucial if audited and the medical expense deduction is challenged.  in some situations you may be better off treating them as improvements which would lower your gain when you sell. 

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.