Total vehicle cost $90k… $50k for standard van chassis, plus $40k to do wheelchair conversion features. Purchase was entirely financed with $90k, 5 year loan.
I know only $40k (conversion cost) is allowed as a medical expense. My question is what is the timing of that medical expense deduction? …
A) is the $40k deduction reported all in year of vehicle purchase, or
B) is the $40k deduction spread out over 5 years of loan payments ($8k per year)?
Normally medical expenses are deductible “in the year paid”, not in year service is provided.
So for medical equipment purchased via a loan, does the IRS consider “in the year paid” to be the actual vehicle purchase date (100% in year 1), or in year of loan payments (20% years 1 thru 5)?
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this is from IRS PUB 502 Medical expenses
Car
You can include in medical expenses the cost of special
hand controls and other special equipment installed in a
car for the use of a person with a disability.
Special design. You can include in medical expenses
the difference between the cost of a regular car and a car
specially designed to hold a wheelchair.
Cost of operation. The includible costs of using a car for
medical reasons are explained under Transportation,
See IRS PUB 502 https://www.irs.gov/pub/irs-pdf/p502.pdf
I would also say the full cost is deductible as a medical expense in year the conversion is complete OR the year of purchase if ready-built.
Please check back later. I will page Champ @Mike9241.
this is from IRS PUB 502 Medical expenses
Car
You can include in medical expenses the cost of special
hand controls and other special equipment installed in a
car for the use of a person with a disability.
Special design. You can include in medical expenses
the difference between the cost of a regular car and a car
specially designed to hold a wheelchair.
Cost of operation. The includible costs of using a car for
medical reasons are explained under Transportation,
See IRS PUB 502 https://www.irs.gov/pub/irs-pdf/p502.pdf
I would also say the full cost is deductible as a medical expense in year the conversion is complete OR the year of purchase if ready-built.
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