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Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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My father passed away in 2005. At that time my sister paid

Resolved Question:

My father passed away in 2005. At that time my sister paid $7,891.75 for funeral, $4,552.88 for monument and $1,341.66 for security system for his house. The farm and house are finally selling and she wants to collect $20,000.00 from my proceeds. (difference is her expenses during his illness, doctor visits, etc...) I would like to know can I deduct any of this from my taxes since I am paying taxes on the income from the sale? If so can I defer and deduct it over a period of time?
Submitted: 7 years ago.
Category: Tax
Expert:  Merlo replied 7 years ago.
Hello PH,

Funeral expenses are never deductible. The medical expenses can only be claimed if they are paid for someone that you claim as a dependent on your return. And even then, they must be claimed in the year they were paid, so you could not now claim any expenses that were paid back in 2005 or any year other than the current year.

If you inherited this farm and home, be sure that you are using the stepped up basis which was equal to the fair market value on the day you inherited the property. Your actual gain will then be the difference between the sale price less your stepped up basis.

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Thank you and let me know if you have more questions.

Edited by Merlo on 10/1/2009 at 9:17 PM EST
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