LLC property as residence and medical expenses

Forum|Forum|3 years ago
May 21, 2022
2 replies
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I have a multi-member LLC. The LLC has had "property held for investment" for more than five years. For almost three years, we have resided in the LLC's property. Due to my wife's poor health, we need to make capital improvements to the property. Can we fully deduct these as personal medical expenses? Thanks

TurboTax Business Windows

Best answer by TomD8

@Chirpee --

I think you will find this web reference very informative with regard to your original question:

https://www.nolo.com/legal-encyclopedia/deducting-medical-home-improvements.html

Mike9241

are you and your wife the only members? if not this could present tax issues.

if you are, see PUB 502 capital expenditure section (page 6) for costs you can deduct. improvements that increase the value of the property are not deductible but add to the tax basis.

https://www.irs.gov/pub/irs-pdf/p502.pdf

ChirpeeAuthor

Thanks for your reply. No, my wife isn't a member. My BIL is. My wife is a very part-time employee of the LLC.

Critter-3

You have a potential mess on your hands ... you are living in an asset owned by the partnership probably rent free. If so you cannot deduct the improvements as medical deductions on a personal tax return and they would not be a deduction on the 1065 either. Please seek local professional assistance to see if anything you are doing is legal at all.

ChirpeeAuthor

What I posted yesterday is a scenario; I'm sorry I didn't post as such.

My wife and I are the only members in the LLC. My wife is not an employee of the LLC. We have resided in the PHI for 2.75 years of the last 5.5 years. My wife does have serious and costly medical expenses, roughly 20K per year.

I now know, for some reason, it's best for her to remain a member in the LLC and not an employee.

Thanks to all for any and all input.