Tax law: My wife and I are retired and live on a cruising yacht outside the United States 10 or more months a year. We file 1040s with a Ft. Myers, FL address, from which our mail is forwarded to us. We recently returned to the US for medical treatment (breast cancer therapy) at UCSF in San Francisco. Can we deduct $100 per day lodging expense while we stayed in an apartment near the hospital where treatment was being administered? We think the answer hinges on the definition of our tax home. We think we can argue that equivalent medical treatment was not available where our boat was moored. Our lodging meets all the other criteria in IRS Pub. 502.
Country relating to Question: United StatesState (if USA): FloridaWhat have you tried so far?: I've read 2011 IRS Pub 502, and done a search of tax opinions relating to tax home definition, but can't find any definition of "tax home" for retired persons living outside the US.
Welcome! Thank you for your question.
You are correct that the answer would hindge on the definition of "home" for the purposes of the medical expense deduction.
In publication 523 it describes "main home" as being the home you live in most of the time, including a house boat. It sounds like your yacht would qualify as a home here.
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The citation in the answer addresses "main home", a term used to determine the tax status of an abode for purpose of sale, mortgage, etc. IRS Publication 502, Medical and Dental Expenses, says only that we may include the cost of lodging "while away from home" if four requirements are met, and the lodging does meet those requirements. We are concerned that the word "home"in Pub 502 means not "main home" in the sense of Pub. 523 but "tax home" in the sense of section162(a)(2) of the tax code. The problem with "tax home" is that it relies partly on where one's business is conducted. This clearly does not apply to persons who are retired and whose income derives almost entirely from investments and Social Security. Is there an opinion or IRS position defining "home" in the Pub 502 sense?
That is not true. They are one in the same. "Main home" refers to the deductibility of expenses regarding one's place of abode. The referral to home in Pub. 502 refers to home as the place you are living to determine if you are away from where you reside or abode. There is not a specific reference to the definition of "home" for the use in determining the deductibility of expenses. You must refer to it's other uses within the code.
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