My wife and I support our adult disabled child in a small home which we purchased last year to keep some normalcy of independence. She is unable to work. Options?

[SteveMMM]

Our daughter is 31, disabled with Autism, TBI, PTSD and other conditions that make working impossible. We purchased a small home nearby where she could have some normalcy with independence, but we pay 100% of everything.  The Equity Line to secure the home, all utilities, taxes and 24x7 security monitoring for her safety as well as food.  We own the home, but the IRS codes say nothing about supporting a dependent disabled adult not living with us, but still dependent on us.  This home we bought, we spent close to $70k in the sale, repairs, furnishing and everything that goes with having a second home.  We take her to doctors, therapists and any other medical appointment she needs.  Is there any help or forms to complete to help us?  We opted for this route instead of a group home where she would do far worse than being on her own.  It goes with Autism, Aspergers Syndrome, PTSD, AD, TBI where her concept of "time" is non existent (literally).

[xmasbaby0 · Accepted solution]

Your situation might call for seeing a local paid tax professional.  As stated, you can get the $500 credit for claiming your daughter as your dependent.  You can include any of her medical expenses you pay for in the medical expense section of your own tax return.  Frankly in this situation I do not know if the security monitoring could be construed as a medical expense.  That's one of the reasons you might want to consult a tax pro.

You can claim the property tax and loan origination fees for the second home you purchased.  Utilities and food are not deductible.  Your repairs are not deductible unless any of them were required to provide handicap access, etc.

You mentioned using a HELOC to purchase the second home.  The rules for deducting home equity interest have changed a lot and you should seek professional advice--it is unlikely that you can deduct it since you used it to purchase a second home instead of improving your own home.

You sound like good loving parents who are trying your best to give your child a comfortable life.  Best of luck to you.

[CynthiaR]

Because she is disabled and cannot work she would qualify as your dependent.   You would get $500 dependent credit for claiming her.