Question: Jennifer’s 80-year-old father, Robert Jorgensen, lives alone in his home. He qualifies as Jennifer’s medical dependent since he would be her tax dependent (qualifying relative) except for the gross income test ($5,200 for 2025). To help Robert age in place, Jennifer paid for the installation of a stair lift ($3,000) and a zero-threshold shower ($9,500). Medically necessary improvements to a home qualify as itemized medical deductions, provided they don’t increase the home’s fair market value (FMV). If they do, then the expense is reduced by the increase to FMV. While the stair lift does not usually increase basis, the zero-threshold shower adds $2,000 to the value of Robert’s home. What is Jennifer’s allowable deduction for Robert’s improvements on her Schedule A, Itemized Deductions (1040)?

Answer: Jennifer’s deduction on Schedule A is limited to the cost of the stair lift, $3,000, plus only part of the cost of the zero-threshold shower that did not increase the FMV of the home. The deductible amount of a medical improvement on Schedule A is the cost minus any increase in the property’s FMV due to the improvement [Reg § 1.213-1(e)(1)(iii)]. In this case, Jennifer will deduct only $7,500, or ($9,500 - $2,000). Her total deduction will be ($3,000 + $7,500) for a total Schedule A deduction of $10,500.

Additionally, $2,000 of the $9,500 zero-threshold shower will be added to the cost basis of Robert’s home, rather than being deducted on Jennifer’s Schedule A.