Ilija and Branka Mitic - Page 11




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            adjusted gross income.  See sec. 213(a).  As pertinent here,                               
            section 213(d)(1)(A) defines the term “medical care” to mean                               
            “amounts paid for the * * * cure, mitigation, treatment, or                                
            prevention of disease, or for the purpose of affecting any                                 
            structure or function of the body”.  Section 1.213-1(e)(1)(ii),                            
            Income Tax Regs., provides that “Deductions for expenditures for                           
            medical care allowable under section 213 will be confined strict-                          
            ly to expenses incurred primarily for the prevention or allevia-                           
            tion of a physical or mental defect or illness.”  An expenditure                           
            that “is merely beneficial to the general health of an individ-                            
            ual, such as an expenditure for a vacation, is not an expenditure                          
            for medical care.”  Id.  Capital expenditures generally are not                            
            deductible.  See sec. 263 and the regulations thereunder.                                  
                  However, an expenditure which otherwise qualifies as a                               
                  medical expense under section 213 shall not be disqual-                              
                  ified merely because it is a capital expenditure.  For                               
                  purposes of section 213 and this paragraph, a capital                                
                  expenditure made by the taxpayer may qualify as a                                    
                  medical expense, if it has as its primary purpose the                                
                  medical care (as defined in subdivisions (i) and (ii)                                
                  of this subparagraph) of the taxpayer, his spouse, or                                
                  his dependent.  Thus, a capital expenditure which is                                 
                  related only to the sick person and is not related to                                
                  permanent improvement or betterment of property, if it                               
                  otherwise qualifies as an expenditure for medical care,                              
                  shall be deductible * * *.  Moreover, a capital expen-                               
                  diture for permanent improvement or betterment of                                    
                  property which would not ordinarily be for the purpose                               
                  of medical care (within the meaning of this paragraph)                               
                  may, nevertheless, qualify as a medical expense to the                               
                  extent that the expenditure exceeds the increase in the                              
                  value of the related property, if the particular expen-                              
                  diture is related directly to medical care.  Such a                                  
                  situation could arise, for example, where a taxpayer is                              
                  advised by a physician to install an elevator in his                                 





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Last modified: May 25, 2011