Your mom needs to move to an assisted living facility but you're having difficulty selling her house . . ....Read more
Tax Break Helps Pay for CCRC Fees
- May 29th, 2013
Continuing Care Retirement Communities (CCRCs) -- which offer the entire continuum of care under one roof -- are an appealing retirement housing option, but they can be very expensive. The good news is there is a little-known tax break that can help defray the costs.
CCRCs offer a range of services from independent housing to assisted living to round-the-clock nursing services. When moving into a CCRC, residents enter into a contract that usually includes a hefty entrance fee that may or may not be refundable. The residents pay a monthly fee as well. Entry fees can run from $20,000 to more than $500,000, with monthly charges ranging from $200 to $3,500 or more.
Local Elder Law Attorneys in Ashburn, VA
Hale Ball Carlson Baumgartner Murphy PLC
Jean Galloway Ball is certified in Elder Law by the National Elder Law Foundation. She is a 1977 honors graduate of the National Law Center, George Washington University, and she did her undergraduate work at the University of California at Berkeley, graduating Phi Beta Kappa in 1971. She is admitted to practice in Vir...
The Law Firm of Evan H. Farr, P.C.
In practice since 1987, Fairfax Attorney Evan Farr is widely recognized as one of the leading Elder Law, Estate Planning, and Specials Needs attorneys in Virginia and one of foremost experts in the Country in the field of Medicaid Asset Protection and related Trusts. Evan Farr has been quoted or cited as an expert by n...
Margaret A. O'Reilly, PC
Margaret A. O’Reilly is an estate planning and elder law attorney with over thirty-five years of legal experience. Attorney O’Reilly graduated from Duke University with a degree in psychology, and received her law degree from Northeastern University School of Law in Boston, Massachusetts. For over 15 y...
If your medical expenses are more than 7.5 percent of your adjusted gross income (beginning in 2013 the figure is 10 percent for those under age 65), you may be able to deduct some health care costs from your taxes. Because CCRC's provide a full range of health care services, when residents enter a long-term contract with one of these facilities, they are contracting for future health care. If the CCRC's entrance fee is non-refundable, the IRS considers a portion of that fee to be prepayment of medical expenses. If the entrance fee is refundable, the tax deduction only applies to the portion of the fee that is non-refundable. In addition, a portion of the monthly fee may also be deductible. Click here for an article that explains how the tax deduction might work.
The exact percentage of CCRC fees that are tax deductible varies considerably from CCRC to CCRC. The amount doesn't depend on the health care services that an individual resident actually received -- it is the aggregate for the entire community. The CCRC is responsible for informing residents the percentage of its fees that are for medical costs.
If you want to know if a CCRC is right for you or to find out if you are eligible to deduct medical expenses from your taxes, contact your elder law attorney.
For more information on CCRCs, click here.
Last Modified: 05/29/2013