James Albert and Beverly Alderman - Page 8

                                        - 7 -                                         
               Section 213 carves out of the rule of section 262 a limited            
          exception for medical expenses, providing as follows in relevant            
          part:                                                                       
               SEC. 213.  MEDICAL, DENTAL, ETC., EXPENSES.                            
                    (a) Allowance of Deduction.--There shall be                       
               allowed as a deduction the expenses paid during the                    
               taxable year, not compensated for by insurance or                      
               otherwise, for medical care of the taxpayer, his                       
               spouse, or a dependent (as defined in section 152), to                 
               the extent that such expenses exceed 7.5 percent of                    
               adjusted gross income.                                                 
                         *    *    *    *    *    *    *                              
                    (d) Definitions.--For purposes of this section--                  
                         (1) The term “medical care” means amounts                    
                    paid--                                                            
                              (A) for the diagnosis, cure, mitigation,                
                         treatment, or prevention of disease, or for                  
                         the purpose of affecting any structure or                    
                         function of the body,                                        
                              (B) for transportation primarily for and                
                         essential to medical care referred to in                     
                         subparagraph (A),                                            
                              (C) for qualified long-term care                        
                         services (as defined in section 7702B(c)), or                
                              (D) for insurance (including amounts                    
                         paid as premiums under part B of title XVIII                 
                         of the Social Security Act, relating to                      
                         supplementary medical insurance for the aged)                
                         covering medical care referred to in                         
                         subparagraphs (A) and (B) or for any                         
                         qualified long-term care insurance contract *                
                         * * [2]                                                      

               2 The definitions presently codified in sec. 213(d) were               
          formerly contained in sec. 213(e), which was redesignated for               
                                                             (continued...)           





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