- 38 -
The ruling first examined previous rulings discussing the
deductible portion of fees paid by taxpayers for lifetime care
from retirement homes. Id. The ruling cited the statement in
Rev. Rul. 67-185, supra, quoted above. The ruling then addressed
the monthly fee issue and stated:
In addition, the portion of the monthly fee (15
percent * * *) paid by the taxpayers that is properly
allocable to medical care is also deductible as an
expense for medical care in the year paid, subject to
the limitations prescribed in section 213 of the Code.
[Id.]
The ruling also discussed the deductibility of portions of an
entrance fee paid by the taxpayers.23 Id.
23In other rulings, taxpayers have been allowed to deduct
specific portions of entrance fees paid to retirement homes,
subject to the limitations of sec. 213. See Rev. Rul. 76-481,
1976-2 C.B. 82 (10 percent of entrance fee allocable to medical
care); Rev. Rul. 75-302, 1975-2 C.B. 86 (30 percent of entrance
fee allocable to medical care). In Estate of Smith v.
Commissioner, 79 T.C. 313, 321-322 (1982), we held that 7 percent
of an entrance fee paid to a retirement home was allocable to
medical care because this percentage was determined to be the
cost of providing free days of standard care in a convalescent
center for the residents’ lifetimes. The Commissioner acquiesced
in our decision in Estate of Smith at 1984-2 C.B. 1.
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