Income Tax Information
Although Suffield by the River is not a tax adviser, we provide the following letter to our residents on an annual basis.
All or a portion of your monthly fee that you pay as a resident living in an assisted living apartment may be deductible on your federal income tax return as a medical expense.
To distinguish between medical and non-medical expenses, the IRS offers the following general regulatory definition: (i) if the main reason you are living in an assisted living facility is not for medical reasons; i.e., rather for personal or family reasons, then only those charges directly related to medical care are considered medical expenses; (ii) if the main reason you are living in an assisted living facility is for medical reasons, your entire rent is considered a medical expense. A further definition of someone who is in a facility for medical reasons is someone who is unable to perform at least two activities of daily living without substantial assistance from another individual. The six activities of daily living are eating, toileting, transferring, bathing, dressing and continence.
According to IRS Revenue Rulings, even if the main reason you are living in an assisted living facility is not for medical reasons, you can still take as a medical deduction the same percentage of your rent which is the percentage that the facility incurs for its costs to provide medical care compared to the total costs of the facility.
Suffield by the River has determined that twenty-five percent (25%) of our total costs are incurred to provide medical care.
The contents of this correspondence are for informational purposes only, and do not constitute legal, tax or financial advice. To determine if your rent is deductible as a medical expense for income tax purposes, please consult your accountant or tax adviser.
Should you have any questions regarding the information contained herein or any other questions, please do not hesitate to call or stop in and see me.
Celia J. Moffie