Now when it comes to that last tip, there is a however (with the tax code there is always a however). According to Internal Revenue Service spokesman Sam Serio, the cost of permanent improvements that increase the value of your property may be partly included as a medical expense. However, the cost of the improvement is reduced by the increase in the value of the property. The difference, if any, is a medical expense.
Go ahead. Shake your head out of confusion. I did.
Here's what that means. Suppose you install an elevator because you have a heart condition and can't climb stairs. The elevator costs $8,000. If the improvement increased the value of the property by $4,400, you can deduct only $3,600 as a medical expense.
How do you determine how much the improvement might increase your property value? To back up the deduction, you should get an appraisal.
"With real estate we all know it's about location, location, location," Weisman said. "But with the IRS it's all about documentation, documentation, documentation."
The good news is that some home improvements aren't considered by the IRS to increase the value of your property, so they can be included in full as medical expenses. Those improvements include, but aren't limited to, the following:
• Building entrance ramps.
• Widening doorways outside or inside the house.
• Adding handrails or grab bars.
• Installing porch lifts or some other type of lift.
