Client paid $120,000 this year for medical expense portion of continuing care, all deductible in one lump sum. Only the funds were paid by the “B” trust, the irrevocable trust set up when her husband died long ago. Can this be deducted by her? The trust is allowed to pay 5% plus other items deemed necessary (the usual for such a trust), including medical costs. I think it could be “deemed” paid by her; if not, perhaps we can have her reimburse the trust for the medical expense paid and then deduct?
I understand whether the trust pays or reimburses her, the expense cannot flow through to her and she can’t take the deduction. But what if SHE reimburses the TRUST for the medical payment, and does so this year? She has the funds to do that.