Convert a Life Insurance Policy: Life Care Funding

Claim Veterans Benefits: Aid and Attendance Program

ElderLife Financial Services offers a line of credit that can bridge the gap in funding as you wait for veterans benefits to start or for the sale of a home. Payments can be sent directly to our business office each month at your request and they make it easy for multiple family members to share the care. For more information, contact ElderLife Financial Services at 1-888-228-4500 or visit www.elderlifefinancial.com.

Share a Suite

Seek Tax Benefits

You may be eligible to deduct ALL or a substantial portion of your monthly rent as a medical deduction from your yearly tax assessment. The cost of assisted living may be tax deductible as a medical expense for both residents and family members who provide financial support. For more information see Tax Deductibility of Assisted Living Expenses (below), speak to your tax advisor, or visit www.irs.gov.

Medical Expense Deduction

Internal Revenue Code Section 213 (a) provides an itemized deduction for unreimbursed medical expenses to the extent that such expenses exceed 7.5% of adjusted gross income. Treasury Department Regulations state that the extent to which expenses for care in a facility other than a hospital are deductible depends on the condition of the individual and the nature of the services received. It does not depend on the nature of the facility.

The cost of medical care, meals and lodging is deductible when the principal reason for residing at Terrace Communities is for medical care. Medical reasons may include the following:

Resident is unable to perform, without substantial assistance, at least two out of six activities of daily living (eating, toileting, transferring, bathing, dressing, continence) for a period of at least 90 days due to a loss of functional capacity, OR
Resident requires substantial supervision to protect him or herself from threats to health and safety due to cognitive impairment.

When the principal reason for residing at Terrace Communities is not medical care, medical costs may be deductible, but meals and lodging expenses are not deductible.

Claiming Resident as a Dependent

If a family member pays for all or a portion of the cost of the facility, he or she may be able to take the medical deduction if the resident of the facility qualifies as the payer's dependent.

We recommend that you consult with a tax advisor to determine the potential tax treatment in your particular circumstances. Please refer to the Internal Revenue Code Sections 7702B(c)(1), 213 and 4980C and Notice 97-31, 1997-21, IRB, 05-06-97 at www.irs.gov.

Information and Resources

Financial Options

Tax Deductibility of Assisted Living Expenses

Caregiver Library

Managing Your Health

Senior Services Organizations