washingtonpost.com  > Business > Columnists > The Color of Money
Page 2 of 3  < Back     Next >

Easing Burden On Caregivers

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.

_____Live Online_____
Michelle Singletary hosts bi-weekly discussions on personal finance issues, such as love and money and kids and finances.
Join The Color of Money Book Club
_____Column Archive_____
Analyze the Cost Of Grad School (The Washington Post, Jan 16, 2005)
Restructuring Student Loan Program Could Ease Graduates' Burden (The Washington Post, Jan 13, 2005)
Read Michelle's Past Columns
_____Your Money_____
Plan Your Budget
Calculate Your Net Worth
Mutual Funds Report
Personal Finance Report
Track Your Portfolio
Calculate Currency Conversion
_____Investing Columns_____
Washington Investing
The Color of Money
Cash Flow
The Week in Stocks
Personal Finance Special Report

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.

< Back  1 2 3    Next >

© 2004 The Washington Post Company