We purchased a medically modified van for wheelchair accessibility -- van is being paid on a 10 year loan -- do we have to amortize the deduction or take all at once?

[Carl]

I'm looking at IRS Tax Topic 502 at <a rel="nofollow" target="_blank" href="https://www.irs.gov/taxtopics/tc502">https://www.irs.gov/taxtopics/tc502</a> and I'm not seeing anything about deducting what you pay for a vehicle -even one modified for medical needs. But I am seeing where you can deduct the operating costs of the vehicle; but only when that vehicle is used to fulfill a justfified medical need, such as going to medical appointments and the like. The part I'm reading states:
-------------------------------------------
•Payments for transportation primarily for and essential to medical care that qualify as medical expenses, such as payments of the actual fare for a taxi, bus, train, ambulance, or for transportation by personal car, the amount of your actual out-of-pocket expenses such as for gas and oil, or the amount of the standard mileage rate for medical expenses, plus the cost of tolls and parking
--------------------------------------------
So based on that, looks like you can deduct either the actual costs incurred for qualified transportation, or the "per-mile" deduction for qualified transportation when using a vehicle you own.
Perhaps someone else can jump into this thread and provide further information we're not aware of on this?

[Anita01]

I think they could take a deduction for the vehicle as a medical expense for transportation but only for the excess of cost over a nonmodified van.  I don't believe the loan matters at all.

[metalman41]

I know the modification cost is deductable under medical expenses -- my concern is that we are paying that off over 10 years, I did not pay for the mod all at once -- so
i believe I have to amortize that cost over the life of the loan as opposed to a one time deduction.

[Anita01]

Critter is correct, the loan doesn't matter.

[Carl]

I can't find anything on the IRS website specifically related to vehicle modifications. But there's tons of stuff on primary residence modifications for medical necessity. I would therefore assume the same rules would apply to a vehicle that is owned by the person needing such modifications so they can drive it.
So what I see on the IRS website says that the cost of the modifications are tax deductible, not the cost of the entire home. So replacing the word "home" with "car" or "vehicle" I would assume the same applies. Note the IRS pub 502 says "deduct", and as far as I can find does not even insinuate that anything has to be amortized.
However, on several other tax websites that are not "official" IRS sites, they say that modifications to the vehicle have to be amortized over 10 years. Thing is, I find nothing in IRS Pub 502 which states that. In fact, I searched that whole document for the words "amortize", "capitalize" and "depreciate" and those words exist nowhere in that document. But the word "deduct" is all over the place.

[Critter · Accepted solution]

You can take the extra cost of the modifications in the year of purchase ... the fact that you took a loan out is not material to the deduction.