medical expense deduction

What is the name of your state? Texas

Regarding a deduction for a decedent's medical expenses:
Does the executor have the choice to take this deduction either on the estate tax return or the decedent's final income tax return?

Are all medical expenses incurred in the year of death deductible on the estate tax return if most were paid prior to the date of death?

Or, are only the medical expenses paid within one year following the date of death deductible on the estate tax return?

The following is from IRS Publication 448, Federal Estate and Gift Taxes:

Medical expenses. If medical expenses are deducted only on the estate tax return, they are fully deductible as claims against the estate.

If expenses for the decedent's medical care are paid within one year after date of death, they are treated as being paid in the tax year in which they were incurred. In this case, if a waiver is filed, the expenses may be deducted on the decedent's income tax return for the year incurred. The deduction may be claimed only to the extent that the decedent's total medical deduction exceeds the percentage limitation for the year incurred.

If part of the medical expenses are deducted on the decedent's income tax return and part deducted on the estate tax return, the part deducted on the estate tax return may not include the amount that is not deductible for income tax purposes because of the percentage limitation.

Example. The decedent incurred $20,000 in medical expenses in 1991. These were the only medical expenses incurred during the year. The decedent's income tax return for 1991 showed an adjusted gross income of $100,000.
The decedent died in 1991. You, as the executor of the decedent's estate, paid the $20,000 in medical expenses within one year of the decedent's death. You elected to deduct $5,000 as a claim against the estate. You file an amended income tax return for 1991 and attach the necessary waiver indicating that $15,000 had not been and would not be deducted for estate tax purposes. Only $7,500 ($15,000 - $7,500 (7.5% x $100,000) ) is deductible on the decedent's income tax return for 1991.

If you had deducted all the medical expenses as claims against the estate, $20,000 would be deductible for estate tax purposes.

I greatly appreciate your reply.

The IRS instructions for Form 706 (page 16), Schedule K, Income vs. estate tax deduction, read: Taxes, interest, and business expenses accrued at the date of the decedent's death are deductible both on Schedule K and as deductions in respect of the decedent on the income tax return of the estate.

If you choose to deduct medical expenses of the decedent only on the estate tax return, they are fully deductible as claims against the estate. If, however, they are calimed on the decedent's final income tax return under section 213(c), they may not also be claimed on the estate tax return.



Reading these instructions, I understand I have the choice to deduct medical expenses of the decedent either on the estate tax return or the decedent's final income tax return. Am I right? Many attorneys in the Houston area seem to have never considered such a choice.

Even reading and re-reading from the above IRS Publication 448, it does not state that medical expenses must be paid after the date of death to be deductible as claims against the estate. In other words, the medical expenses could be paid prior to death (in the year of death) and be deductible on the estate tax return. Is this so?

I keep looking at the words from Pub 448: If expenses for the decedent's medical care are paid within one year after date of death, they are treated as being paid in the tax year in which they were incurred.

Apparently as such, they are deductible either on the estate tax return or on the decedent's final income tax return. True?

Is IRS publication 448 still in print? I don't find it on the IRS website

I UNDERSTAND I HAVE THE CHOICE TO DEDUCT MEDICAL EXPENSES OF THE DECEDENT EITHER ON THE ESTATE TAX RETURN OR THE DECEDENT'S FINAL INCOME TAX RETURN. AM I RIGHT?
If the expenses were paid by the estate within one year of the death, then they can be deducted on either the estate income tax return, or the final income tax return of the decedent. To the extent they are deducted on the estate income tax return, they can be deducted from the taxable estate as a claim against the estate on the estate’s estate tax return. Notice that the estate has an income tax return and an estate tax return to file.

IT DOES NOT STATE THAT MEDICAL EXPENSES MUST BE PAID AFTER THE DATE OF DEATH TO BE DEDUCTIBLE AS CLAIMS AGAINST THE ESTATE. IN OTHER WORDS, THE MEDICAL EXPENSES COULD BE PAID PRIOR TO DEATH (IN THE YEAR OF DEATH) AND BE DEDUCTIBLE ON THE ESTATE TAX RETURN. IS THIS SO?
This is not so. Only claims against the estate that exist at the time of death can be deducted on the estate’s estate tax return as claims against the estate. And only expenses that the estate pays can be deducted on the estate’s income tax return. So any expenses paid prior to death are not a claim on the estate. They can be deducted only on the decedent’s final income tax return.


IF EXPENSES FOR THE DECEDENT'S MEDICAL CARE ARE PAID WITHIN ONE YEAR AFTER DATE OF DEATH, THEY ARE TREATED AS BEING PAID IN THE TAX YEAR IN WHICH THEY WERE INCURRED.
APPARENTLY AS SUCH, THEY ARE DEDUCTIBLE EITHER ON THE ESTATE TAX RETURN OR ON THE DECEDENT'S FINAL INCOME TAX RETURN. TRUE?
Yes, that is true.

I'm sorry, Pub 448 is not currently available. But you quoted the appropriate rules from the Instructions to Form 706.

Madam/Monsieur:
Merci!

Thank you for your clear and helpful replies.