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November 19, 2010 at 11:31 AM
In our search to address the issues for our clients and our own families of living to a ripe old age, remaining in the homestead is a topic that comes up frequently. For most of our families, home is where the heart is; it is also where many of our family members would prefer to remain.
Many of the studies I have read find that older Americans prefer to stay in their own homes if they possibly can as they age. The National Association of Home Builders has professional Certified Aging-In-Place Specialists on staff who can assist in creating universal design techniques that will enable a loved one to remain in their home safely and independently.
Uncle Sam even provides us with a break on home improvements that can be claimed as medical deductions under Schedule A (subject to the 7.5% floor) on your federal income tax return. Individuals can claim medical deductions for the cost of special equipment installed in a home if the main purpose is to accommodate the individual's, spouse's or dependent's medical needs. If the capital expenditure for the home qualifies as a medical expense, its operating costs and upkeep also qualify as medical expenses as long as the medical requirement continues.
The key is that the improvement or equipment installed does not increase the value of the home. Where the improvement or equipment does increase the value, only the cost that is in excess of the increase may be treated as a medical expense. More specific information can be found in IRS Publication 502.
