Randy is advised by his physician to install an elevator in his residence, since he is afflicted with heart disease. The cost of installing the elevator is $10,000 and it has an estimated useful life of 10 years. He installs the elevator in January of 2014, and it increases the value of his residence by $8,000. Disregarding the limitation based on adjusted gross income, how much of the cost of the elevator may Randy take into account in determining his medical expense deduction for 2014?

Question

Quizplus · Accepted Answer

Randy can only include medical expenses that exceed 10% of his adjusted gross income (AGI) for the year. Assuming his medical expenses exceed this threshold and he itemizes deductions, he can include the cost of installing the elevator in his medical expenses, but only to the extent that it exceeds the increase in value to his residence. Therefore, the amount he can include is $10,000 - $8,000 = $2,000.

Randy Is Advised by His Physician to Install an Elevator