If a decedent's medical expenses are paid by the estate, what is a key consideration in determining whether they can be deducted for income tax purposes?
Understand the Problem
The question asks about the key consideration for deducting a decedent's medical expenses paid by their estate for income tax purposes. We need to identify the factor that determines deductibility.
Answer
Whether the expenses are deducted on the estate tax return or the estate's income tax return, as they can't be on both, and AGI threshold if deducting on the income tax return.
A key consideration is whether the expenses are being deducted on the estate tax return (Form 706) or the estate's income tax return (Form 1041). They cannot be deducted on both. If deducting on the income tax return (Form 1041), they are subject to an AGI threshold.
Answer for screen readers
A key consideration is whether the expenses are being deducted on the estate tax return (Form 706) or the estate's income tax return (Form 1041). They cannot be deducted on both. If deducting on the income tax return (Form 1041), they are subject to an AGI threshold.
More Information
Medical expenses of a deceased person paid by their estate can be deducted for income tax purposes under certain conditions. It's important to note the expenses can only be deducted once, either on the estate tax return or the income tax return.
Tips
A common mistake is deducting the same medical expenses on both the estate tax return and the income tax return. To avoid this, carefully track where each expense is being deducted.
Sources
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