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Posted by Samantha Hill - take out TRASH on March 4, 2008, 3:29 am
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My sister doesn't have newsgroup access, so I am asking this for her.
She is caring for my mother, who has early to mid stage Alzheimer's, in
her home. My mom has some retirement and interest income and social
security -- not sure how much, but she is neither poor nor rich -- and
she pays my sister an amount of money that is categorized as room and
board and another amount that is categorized as caregiving after my
sister had to give up her job to help care for Mom -- doing her laundry,
cleaning her room, personal care, taking care of her finances, preparing
her meals, making sure she takes her medications properly, driving her
wherever she wants or needs to go, arranging for and coordinating
medical care, etc. -- all things that my mom no longer has the capacity
to do for herself and that would her cost a ton more if she went to an
assisted living center or had to hire an outside caregiver.
Here are my questions:
1. How do we determine what of this is legally income to my sister, what
she has to pay self-employment tax on, what she has to file a Schedule C
on, how many Schedule Cs she needs to file, etc.?
2. Can my mom deduct any of the caregiver funds as a medical expense?
She can get a letter from a doctor stating she has Alzheimer's.
If there is a web site that has this information that you can refer me
to so you don't have to repeat it here, I'd be glad to take the URL and
read up on it on my own.
Thanks very much!
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Posted by dpb on March 4, 2008, 10:18 am
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Samantha Hill - take out TRASH to reply wrote:
> My sister doesn't have newsgroup access, so I am asking this for her.
>
> She is caring for my mother, who has early to mid stage Alzheimer's, in
> her home. My mom has some retirement and interest income and social
> security -- not sure how much, but she is neither poor nor rich -- and
> she pays my sister an amount of money that is categorized as room and
> board and another amount that is categorized as caregiving ...
...
> 1. How do we determine what of this is legally income to my sister,
> what she has to pay self-employment tax on, what she has to file a
> Schedule C on, how many Schedule Cs she needs to file, etc.?
>
> 2. Can my mom deduct any of the caregiver funds as a medical expense?
> She can get a letter from a doctor stating she has Alzheimer's.
>
>
> If there is a web site that has this information that you can refer me
> to so you don't have to repeat it here, I'd be glad to take the URL and
> read up on it on my own.
I would recommend starting at the IRS w/ Pub 554, particularly sections
on nursing and long-term care.
In general, the medical help is qualified medical expense to your
mother, the wages paid are income to your sister. "Nursing" services in
this context do not have to be performed by trained nurse to qualify.
My reading would be it might even be possible the room & board is
qualified owing to the disability, but read carefully to see if that is
qualified in the actual rules as only applying to actual nursing homes,
etc., not in an unlicensed facility.
The rest of it we've been thru w/ my mother (my condolences, it isn't
easy) but she was in a nursing home after the (nonqualifying) assisted
living was no longer an option.
--
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<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by dpb on March 4, 2008, 11:30 am
Please log in for more thread options dpb wrote:
> Samantha Hill - take out TRASH to reply wrote:
>> My sister doesn't have newsgroup access, so I am asking this for her.
>>
>> She is caring for my mother, who has early to mid stage Alzheimer's,
>> in her home. ...
> I would recommend starting at the IRS w/ Pub 554, particularly sections
> on nursing and long-term care.
...
On the treatment of the rent and all, need somebody else who knows that
area -- there are lots of things about renting independent of the
caregiving part that might (or might not, I "know nuttink" about that
part) help as well.
Besides other advice you're almost certain to receive here, this
situation might well be worth a visit to the pro's over -- the whole
senior caregiving thing including business details of the situation to
have everything in place.
--
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Seth on March 4, 2008, 1:33 pm
Please log in for more thread options >Samantha Hill - take out TRASH to reply wrote:
>> She is caring for my mother, who has early to mid stage Alzheimer's, in
>> her home.
>My reading would be it might even be possible the room & board is
>qualified owing to the disability, but read carefully to see if that is
>qualified in the actual rules as only applying to actual nursing homes,
>etc., not in an unlicensed facility.
Wouldn't they be "for the convenience of the employer"?
Seth
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by dpb on March 4, 2008, 3:16 pm
Please log in for more thread options Seth wrote:
>> Samantha Hill - take out TRASH to reply wrote:
>
>>> She is caring for my mother, who has early to mid stage Alzheimer's, in
>>> her home.
>
>> My reading would be it might even be possible the room & board is
>> qualified owing to the disability, but read carefully to see if that is
>> qualified in the actual rules as only applying to actual nursing homes,
>> etc., not in an unlicensed facility.
>
> Wouldn't they be "for the convenience of the employer"?
Don't see that that is necessarily proscribed even if so and it isn't
really clear that in a case such as this that it is the reason--it could
have been the mother's home wasn't suitable; the daughter/sister's is.
It's clear if the person has been deemed chronic by appropriate
physician that cost of lodging and meals is allowable in a nursing home.
While I can't find a firm parallel that specifically addresses the
equivalent payments going to a private caretaker, I don't see a definite
proscription, either. I suspect there's opinion/case on it given the
prevalence of the situation of elderly parents needing care these days,
but I would recommend more research before making the election.
Clearly the nursing help is qualified; other than the rule/law may
proscribe it, I see no real difference in the circumstance of paying for
care from the nursing home vs paying in the case the daughter for
similar (and probably better for less) care. It's just whether the
private as opposed to public is allowed--again, I don't see an absolute
one way or the other in Pub 554 as a resident isn't specifically
addressed although some examples of remaining in one's own home are.
I personally would be willing to argue that the election is for medical
reasons, not personal. I might not win, but in the situation unless I
found a definite ruling against I'd probably file making the claim and
pay up if turned down.
--
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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