Phillip, age 66, developed hip problems and was unable to climb the stairs to reach his second-floor bedroom. His physician advised him to add a first-floor bedroom to his home. The cost of constructing the room was $32,000. The increase in the value of the residence as a result of the room addition was determined to be $17,000. In addition, Phillip paid the contractor $5,500 to construct an entrance ramp to his home and $8,500 to widen the hallways to accommodate his wheelchair. Phillip's AGI for 2017 was $75,000. How much of these expenditures can Phillip deduct as a medical expense in 2017?
A)$14,000
B)$15,000
C)$21,500
D)$29,000
E)None of the above

Question

Quizplus · Accepted Answer

Phillip can deduct the cost of the entrance ramp ($5,500) and the cost to widen the hallways ($8,500) as medical expenses. For the room addition, only the amount that exceeds the increase in home value can be deducted, which is $32,000 - $17,000 = $15,000. Therefore, the total deductible amount is $5,500 + $8,500 + $15,000 = $29,000. However, medical expenses are only deductible to the extent they exceed 10% of AGI, which is $7,500 for Phillip. Thus, the deductible amount is $29,000 - $7,500 = $21,500.

Phillip, Age 66, Developed Hip Problems and Was Unable to Climb