When is a Home Modification Deductible?

Generally, home improvements are not deductible except to offset home gain when the home is sold.  But a medical expense deduction may be claimed when it is a medically-necessary home modification.  The modification expense is deductible as a medical expense to the extent it exceeds any resulting increase in the value of the property.

The full cost of certain improvements can be included as medical expenses, because they are considered not to increase the home’s value.  Examples of these types of modifications include constructing entrance or exit ramps for the home; widening entrance/exit doorways, hallways and interior doorways; installing railings and support bars; and lowering or modifying kitchen cabinets.  Note, however, that medical expenses can be claimed only to the extent that they exceed 7.5% of the taxpayer’s adjusted gross income (AGI) (10% if taxed by the AMT).   

---