Seth Breidbart wrote:
- quote -

Only the amount that mattered. THere is usually a worksheet
in the 1040 booklet.

dick w

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sethb[at]panix.com (Seth Breidbart) wrote:
- quote -

Isn't this an application of the tax benefit rule? That is,
don't you report only amounts for which you received a tax
benefit? Why would you be paying tax on the full amount?
Since you only received a benefit from the $1000, that is
all that should be reported on the subsequent return.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

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Dick Weaver <rweaver[at]ix.netcom.com> wrote:

- quote -

The full reimbursement, or only the amount that mattered?

For instance, the taxpayer is $1000 over the haircut, and
gets a $2000 reimbursement the following year. Is the full
$2000 reportable as income, or only $1000?

Seth

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AES wrote:

- quote -

A recovery in this year of amounts claimed as deductions in
a prior year is income this year - increasing your AGI.

For many people, trading a deduction in one year for income
in a later year is a bad idea. THere is a simple
alternative - you are, in general, not required to claim all
the deductions you are entited to. So work up an estimate
of your 2006 return and do the math:
- a 2005 deduction and 2006 recovery income
- less 2005 deduction and no 2006 recovery.

If you've already filed 2005 and discover that there is
enough at stake that you wished you'd filed the other way,
do an amended return.

dick w

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Spouse had large medical expenses in late 2005 with a
medical service provider who simply "doesn't bill insurance
companies" (services were worth it, despite this unhelpful
attitude). Amounts were enough to push total medical
expenses for 2005 above threshold.

Submitted these charges to our health plan for reimbursement
in timely fashion; received a partial reimbursement (all
that our health plan would cover) in Feb 2006. If these
reimbursements had arrived in 2005 we probably have been
below threshold, but had no way to know this in 2005 because
health plan hadn't responded yet.

Is this kind of situation just handled on an "annual cash
flow basis"? -- i.e., each year's net medical cost stands on
its own, using a cash flow basis, and we're entitled to 2005
deduction?

What if we were above threshold in this way in 2005, but
reimbursements plus greatly improved health lead to actually
_negative_ net medical costs in 2006? (i.e. delayed 2005
reimbursements greater than 2006 expenses?) Does this
become a "negative medical deduction" in 2006?

Thanks . . .

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