Continuing care retirement communities (CCRCs) allow seniors to live in one community while accessing different levels of care as their needs change. Some CCRCs require a substantial entry fee, and nearly all CCRCs charge ongoing monthly fees. IRS guidance and U.S. Tax Court precedent allow some residents to deduct a portion of these costs as medical expenses if specific requirements are met. Tax deductibility depends on factors such as contract terms, level of care and proper documentation. Understanding the rules can help you fully claim deductions you're entitled to and minimize audit risk. Contact us to learn how CCRC costs may affect your tax planning.
