MTW wrote:

- quote -

judge that it doesn't increase the value, since I presume
you could present an endless number of individual experts
who would testify to this fact in the Seattle market. Your
bigger problem would more likely be with the IRS agent who
just transferred into Seattle from out of state <grin> .

Kind of like years ago when we had a married filing separate
return and got stuck with an agent that just moved into the
area from the Midwest who initially believe our explanation
of the impact of community property on the return obviously
could *not* be the way it worked. We were able to convince
the agent to talk to others at the IRS who had been around
the state for a while to confirm we really weren't making
this up <grin> .

- quote -

Given the IRS's apparent exam position on repairs vs.
improvements, they wouldn't seem to initially have a problem
<grin> . However, the court likely would note that these are
different issues, and the testing wouldn't need to be the
same. The issue for repair vs. improvements derive from the
IRS regulations in that area, while the medical matter has
developed under its own regulations and case law.

--
Ed Zollars, CPA
Phoenix, Arizona

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Ed Zollars, CPA wrote:

- quote -

But in my part of the country that would likely be a bump
DOWNWARD. Although pools might be an "asset" in Phoenix,
they are more likely a "liability" in Seattle. This simply
points out the problem with these "increase in FMV"
provisions in the code, especially if none of the Tax Court
judges come from Seattle (and an ACTUAL APPRAISAL isn't
required). <g
And, just to make sure we're all thoroughly confused <g> , I
gather that for the purpose of the medical deduction we
measure the FMV of the property BEFORE the improvement is
made. I would contrast this with the "repair vs. capital"
issue where the starting point is apparently measured AFTER
the repair is made (or, at least, on a hypothetical basis as
if the repair wasn't necessary).

Or, are we saying that a "repair" can never be an
"improvement" for medical expense purposes?

MTW

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- quote -

Clorox works!

Helen, EA in PA
50 miles, 3 days, 1 cause - Multiple Sclerosis Challenge Walk for the Cure
October 1 to October 3, 2004
Donate on-line at www.msandyou.org

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smithff33[at]aol.com (Herb Smith) wrote:
- quote -

The lead paint info is from Rev. Rul. 79-66.

Drew Edmundson, CPA (NC)

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- quote -

Done what Helen. Taken the deduction or removed the mold? <gr
--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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Nanette wrote:

- quote -

Well, generally any "improvements" to a residence or other
personal asset that are medically necessary are deductible
only to the extent the cost of the improvement exceeds the
increase in the fair market value of the property from
having made the improvement.

In some cases that's no problem--the improvement may be one
that actually makes the property less valuable (such as
adding an elevator that takes up substantial room in a home
for a disabled individual--buyers may reasonably prefer the
property *without* that device to get back the room) or at
least no more valuable. But in other cases (adding a pool
is the prime example), there is going to be a "bump" in the
property value.

The issue would be that a house with this mold problem is
going to be worth less on the market than a house rid of the
problem--pretty sure to be true, especially if it's clear a
prospective buyer would know about the problem (and they
almost certainly would). So, the IRS could argue, the cost
of removing the mold and replacing items must be balanced
against the increase in value of the residence.

--
Ed Zollars, CPA
Phoenix, Arizona

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taxingmatters[at]zoominternet.net (Nanette) wrote:

- quote -

I would go for it as a medical deduction. The removal of
lead-based paint is already accepted by the IRS under this
classification (but not the repainting). I believe a case
could also be made for asbestos abaatement and actions
related to reduce radon buildup in your basement, as these
are recognized health hazards. As long as the doctor is
willing to attest that the condition is a health hazard to
the homeowner, then any actions necessary to reduce the
hazard are deductible as a medical expense.

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Did some research on 2 clients but both were so many years
ago I can't locate the cites any more. That being said:
1) took a medical deduction for the cost of removing a tree
from the yard of a newly purchased home. The tree had
pollen and the client had asthma.

2) took costs of ramps, widening doorways, removing and replacing carpet ruined
by the door replacement - for a very large client in a very large wheelchair.

The client, by the way, told me not to worry about audits as
the local IRS office didn't have wheelchair accessible
facilities. (He'd been audited there once and sat out in
front of the building and yelled. Strange man.....but no
problems with his huge medical deduction.)

Nan, (actually Nanette), EA in LA

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- quote -

I've done it and never a problem.

Helen, EA in PA
50 miles, 3 days, 1 cause - Multiple Sclerosis Challenge Walk for the Cure
October 1 to October 3, 2004
Donate on-line at www.msandyou.org

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I have a client who was recently diagnosed with mold induced
respiratory problems. The clients home has been found to
have unacceptable levels of a type of mold that recently has
been identified as causing respiratory problems etc. Her
doctor told her (obviously), that she needs to have all of
the mold in her home removed by a certified contractor. The
doctor is confident that her problems ARE caused by this
mold problem. Clients insurance company won't cover these
repairs as there is not an INCIDENT that caused the mold.
That being said, with documentation from the doctor saying
her condition was caused by the mold, as well as his
recommendations of removing the problem, would you take the
deduction as a qualified medical expense. It will not add
any value to her home. I realize she has to meet the 7.5%
threshold, which she will. I wanted to post this issue to
get feedback from the rest of the group, as well as get the
question out there, as mold has become such a nuissance to
many people recently.

Thank you,

Nanette

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