Medical expense deduction

kellyrn9956

The medical expense tax deduction question seems to be coming up a lot lately, but I am wondering...

If we receive the $20,000 for shared risk as a gift from family, can we deduct the expense on our own return, even if it didn't come from our own personal income? Hmmmm....

Probably a question for a tax accountant, but wanted to hear if anyone had some insight. IL's have offered us the money for shared risk, and I would love to pay them back at least a little with the money from a potential tax return check. Obviously, this would be for next year's taxes. But this might lead us to accepting the money more readily, if we could pay them back even a small portion.

I know that we do not have to pay taxes on the gift income. The giver pays the gift tax.

Mrs.McIrish

I am not an accountant but I think you can take it if you structure it correctly. First off, the IRS allows a yearly gift of 13K per person may be slightly higher now but that is what is was last time I checked). So your family needs to split the gift into 2 portions: say 10k to you and 10k to DH. Deposit funds in your account so it is "your" $. They will not pay a gift tax and neither will you. Then you are free to spend the $$ as you want. If you use it for the shared risk, just keep all your receipts etc and I think you could take it. Just don't have family pay it directly to the IVF program.

kellyrn9956

Thanks. That makes sense.

illinigal

I'm an accountant.  My parents gave Dh and I money in 2011 to pay for most of our last IVF.  Since technically once they gave it to us, it is ours to be used as we see fit, I took the medical deduction on our 2011 tax return.  I was comfortable doing this based on my research and the info on the IRS website.  The previous poster makes a valid point... You can't claim this as medical if they pay the dr directly.