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Old 07-29-2013, 01:32 PM
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Question Wheelchair Accessible (Converted) Minivan Question

Hi, I understand that the used Braun Entervan conversion 2011 Honda Odyssey minivan that we're purchasing for my wheelchair bound husband has some tax implications but I'm not sure exactly what they are. BTW, we're in Washington state, since that might affect answers to my questions. I've heard conflicting stories that I would love to confirm well in advance of preparing 2013 taxes.

The bill of sale breaks out the cost of the van from the cost of the conversion. $37,500 total with $21K for the van and $16.5K for the conversion.

Can anyone confirm these or suggest resources to check (other than visiting with an accountant right now)?

1. The depreciated value of the conversion ($16.5K) - is this fully deductible as a medical expense as long as those expense are at least 10% of our AGI?

2. We have to pay 9.5% "use tax" on privately purchased vehicles here in WA (if you buy at a dealer, I believe they classify it as actual sales tax) - is the 9.5% of $16.5K conversion value an allowable medical deduction?

3. If we end up financing the vehicle and 44% of the price paid/financed is directly associated with the conversion, would any of the interest we pay be deductible as a medical expense?

4. If repairs are required to the conversion that aren't covered by a warranty, are those expenses considered deductible as medical expense in the year they're incurred?

Ultimately I will work with an accountant or tax advisor when doing our 2013 returns but I like to know what I'm dealing with far in advance. I'll appreciate any assistance you can offer!

Have a great day!
Jo-Lynn



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Old 07-30-2013, 01:27 PM
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Originally Posted by NW_Mimi View Post

#1:The bill of sale breaks out the cost of the van from the cost of the conversion. $37,500 total with $21K for the van and $16.5K for the conversion.Can anyone confirm these or suggest resources to check (other than visiting with an accountant right now)?

#2:1. The depreciated value of the conversion ($16.5K) - is this fully deductible as a medical expense as long as those expense are at least 10% of our AGI?

#3;2. We have to pay 9.5% "use tax" on privately purchased vehicles here in WA (if you buy at a dealer, I believe they classify it as actual sales tax) - is the 9.5% of $16.5K conversion value an allowable medical deduction?

#4;3. If we end up financing the vehicle and 44% of the price paid/financed is directly associated with the conversion, would any of the interest we pay be deductible as a medical expense?

#5;4. If repairs are required to the conversion that aren't covered by a warranty, are those expenses considered deductible as medical expense in the year they're incurred?



#1; Not the entire van cost, but the additional costs for the conversion to handicapped capabilities (ie: a chair lift).So if the van without the handicap accessories ells for $25K and it has $10Kof handicap accessories, then only the $10K is considered a medical expense. You can include in medical expenses the cost of special hand controls and other special equipment installed in a car for the use of a person with a disability.You can include in medical expenses the difference between the cost of a regular car and a car specially designed to hold a wheelchair.You cannot deduct the cost of operating a specially equipped car, except as discussed under Transportation. So, the conversion of your van to accommodate your wheelchair is a capital expenditure, and it falls under expenditures that qualify as a medical expense under IRS section 213, making it deductible. IRS regulations discuss home improvements related to medical conditions at length. One requirement is that a capital expenditure that increases the market value of your home is not deductible as a medical expense. For example, if you are wheelchair-bound and spend $21K to install an elevator in your home, and that expenditure increases the market value of your home by $12K, you can only deduct $9K;$21K-$12K.I guess paying $21K to make your van wheelchair-accessible probably doesn’t increase the market value of your van. The cost of driving your child/spouse to medical appointments is also a medical expense. The cost of driving your child/spouse (even in the specially equipped van) for other purposes is NOT.


The $21K was spent to alleviate a physical defect and so it is deductible on Sch A in the year the money was spent; beginning Jan. 1, 2013, you can claim deductions for medical expenses not covered by your health insurance when they reach 10 percent of your AGI. This change affects your 2013 tax return that you will file in 2014. There is a temporary exemption from Jan. 1, 2013 to Dec. 31, 2016 for individuals age 65 and older and their spouses. If you or your spouses are 65 years or older or turned 65 during the tax year you are allowed to deduct unreimbursed medical care expenses that exceed 7.5% of your AGI.




#2: No. You are certainly safe deducting everything above the base van price that was necessary.The fact you financed it is immaterial. You deduct the entire amount the year you purchased it.

You can either use the mileage for the deduction or keep exact tabs on what your gas and oil and service cost. Most people find the latter easier and in fact the mileage allowed is for most people pretty generous compared to the actuals. You can also include parking fees and tolls. You can add these fees and tolls to your medical expenses whether you use actual expenses or use the standard mileage rate.

#3;Correct; Use tax is a tax on items used in WA when sales tax hasn’t been paid. When you purchase a vehicle from a private party, you’re required by law to pay use tax when the vehicle or vessel title is transferred. Use tax is calculated at the same rate as the sales tax at the purchaser’s address. In addition to the general use tax rate, vehicles are charged an additional 0.3% motor vehicle sales/use tax.
“- is the 9.5% of $16.5K conversion value an allowable medical deduction? “=>>No;
You can’t include deprecation, insurance, general repair unless it is used for medical purposes, maintenance; yo can include out of pocket expenses , such as the cost of gas, and oil as long as you use it for med purposes.

#4;As said, You can include out-of-pocket expenses, such as the cost of gas and oil, when you use a car for medical reasons. You cannot include depreciation, insurance, general repair, or maintenance expenses; I guess you can contact an IRS agent for more info on this issue.

#5; If you, your spouse or any of your dependents need the handicap van because of a medical disability, the IRS allows you to include the repair costs in your medical expense deduction on Sch A as long as you itemize deductions. You need to ensure that the van has equipment that allows a handicapped person to drive it or provides easier access into the van, such as a wheelchair lift or ramp. Otherwise, the van does not satisfy the requirement of serving a medical purpose and is not covered under the medical expense deduction. When you include this expense in your medical deduction, keep in mind that the IRS requires you to reduce your total medical expenses for the year by 10 percent before a deduction is available.


Ultimately I will work with an accountant or tax advisor when doing our 2013 returns but I like to know what I'm dealing with far in advance. I'll appreciate any assistance you can offer!”==>>>I guess you can contact a CPA/an EA in yur local area for more accurate info for your federal return. ALSO please visit the IRS webpage for more information; http://www.irs.gov/pub/irs-pdf/p502.pdf



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Old 07-30-2013, 01:54 PM
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Wnhough, Thanks so much for all the info! You pretty much confirmed all of my assumptions and I really appreciate it! Have a great day!



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