@HRSexton thanks so much for the explanation.
Tom and Sally White, married and filing joint income tax returns, derive their entire income from the operation of their retail stationery shop. Their current year adjusted gross income was $100,000, and the Whites itemized their deductions on Schedule A. The following unreimbursed cash expenditures were among those made by the Whites during the year:
Repair and maintenance of motorized wheelchair for physically handicapped dependent child
$ 600
Tuition, meals, and lodging at special school for physically handicapped dependent child in an institution primarily for the availability of medical care, with meals and lodging furnished as necessary incidents to that care
8,000
Without regard to the adjusted gross income percentage threshold, what amount may the Whites claim in their current year return as qualifying medical expenses?
a.
$8,000
b.
$8,600
c.
$0
d.
$600
Explanation
Choice “b” is correct. Repair and maintenance of medical devices for a disabled dependent child ($600) are deductible medical expenses. The cost of a special school for a handicapped person in an institution primarily for the availability of medical care, when the meals and lodging are merely incident to that care ($8,000) is also a deductible medical expense.
Choice “a” is incorrect. Repair and maintenance of medical devices for a disabled dependent child are deductible medical expenses.
Choice “d” is incorrect. The cost of a special school for a handicapped person in an institution primarily for the availability of medical care, when the meals and lodging are merely incident to that care is a deductible medical expense.
Choice “c” is incorrect. Repair and maintenance of medical devices for a disabled dependent child are deductible medical expenses. The cost of a special school for a handicapped person in an institution primarily for the availability of medical care, when the meals and lodging are merely incident to that care is also a deductible medical expense.
I fell for the wrong answer and put $0 because I fell into the trap of thinking that Medical Expenses are not deductible until they reach > 10% of AGI. The reason why these are fully deductible is not clear to me– is it because they are 1) medical expenses for a dependent child? 2) they are medical expenses for someone who is disabled or 3) because it told us “without regard to the AGI percentage threshold?”
Just want to narrow down as to why this doesn't fall under the 10% AGI rule.
Thanks guys.
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