Medical Expenses - Spidell

Medical Expenses

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Message Board Medical Expenses

This topic contains 4 replies, has 4 voices, and was last updated by Lawrence Sternshein 2 months, 1 week ago.

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  • #142509
    Lawrence Sternshein
    Participant

    My clients, H and W, have already given their adult daughter $15,000 each. The medical bill are beginning to be significant and would significantly reduce their child’s tax liability if the additional funds (in excess of $15K each) would be given to the Child and she pays the medical expenses.

    Could the parent pay the expenses directly to the medical providers so a gift tax return is not required AND the child claim the medical expenses as a deduction? Or would they be double dipping and this is not allowed. ie Maintaining their lifetime exemption and getting a medical deduction on their daughter’s tax returns.

    Thank you,
    Larry

  • #142614
    Sandy Weiner
    Participant

    Although the medical expense payments would not count toward the gift tax exclusion, the daughter would not be able to claim the deduction because she did not pay the medical expenses. However she may be able to claim the deduction if she signs a promissory note to pay back the parents, see Rev. Rul. 78-173.

  • #142623
    William Dewberry
    Participant

    With the unified credit, estate & gift exemption, being what it is, why not make additional gifts to the daughter ?

  • #171474
    Michael Duran
    Participant

    Was recently faced with same issue.  Check Judith F. Lang, TC memo 2010-286 for possible authority for the daughter to take the deduction.

  • #171481
    Lawrence Sternshein
    Participant

    Thank you