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Non grantor trust pays qualified medical expenses for

beneficiary. Since the trust can...
Non grantor trust pays qualified medical expenses for beneficiary. Since the trust can not deduct, are the expenses deducted on the beneficiary's 1040 as qualified medical expenses?
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: Remainder trust income pays medical expense for beneficiary. Income goes to beneficiary as DNI. Can beneficiary deduct medical expense on her 1040
JA: Is there anything else the Accountant should be aware of?
Customer: I don't think so
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Answered in 34 minutes by:
5/10/2017
Dr. Fiona Chen
Dr. Fiona Chen, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 485
Experience: Former IRS Revenue Agent
Verified

Dear Customer,

The paid medical expense directly by the Trust are expenses by a different entity, and not expenses of the beneficiary, and should not be deducted on the beneficiary's Form 1040.

However, if the beneficiary would like to deduct on his/her form 1040, the cash money can be given to him as distribution. The beneficiary can pay out from his/her pocket and claim deduction.

Sometimes, the trust designates medical expenses of the beneficiary for a certain purpose, to protect his income structure or to prevent money diverted to other uses. In those cases, such an altered arrangement can alter and destroy the purpose of the trust.

Regards,

Fiona Chen,

Dr. Fiona Chen
Dr. Fiona Chen, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 485
Experience: Former IRS Revenue Agent
Verified
Dr. Fiona Chen and 87 other Tax Specialists are ready to help you
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Customer reply replied 7 months ago
Thank you. The client is an Alzheimer's patient, lives in a Continuing Care Retirement Center. Because she can not keep her cats in the assisted living center, she resides in the Independent Living Side with 24/7 private duty nursing. Her revocable trust pays the monthly maintenance fees to the center. This, then should be deductible to her on her Form 1040? The non-grantor trust is paying the nursing services, and I understand why those can not be deducted to the indivdual.

Dear Customer,

If her personal income tax return reports the income of the revocable trust's income, the medical expenses (long term care expenses) should be able to be able to be deducted on Schedule A of her personal tax return.

Regards,

Fiona

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Dr. Fiona Chen
Dr. Fiona Chen
Dr. Fiona Chen, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 485
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Experience: Former IRS Revenue Agent

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