Rev. Rul. 76-106

Advice has been requested whether, under the circumstances described below, a taxpayer is entitled to a medical expense deduction under section 213 of the Internal Revenue Code of 1954 for wages paid and the cost of meals and lodging furnished to an attendant who cares for the taxpayer's personal and medical needs and performs household duties.

A quadriplegic taxpayer who had undergone an ileostomy employed an attendant to assist in taking care of medical and personal needs such as care of the condition resulting from the ileostomy, dressing, grooming, and bathing. The attendant also performs household duties such as cooking and cleaning. In return for these services, the taxpayer pays the attendant specified wages and also provides meals and lodging for the attendant.

Section 262 of the Code states that, except as otherwise expressly provided, no deduction shall be allowed for personal, living, or family expenses.

Section 213(a) of the Code expressly allows, subject to certain limitations, a deduction for expenses paid during the taxable year, not compensated for by insurance or otherwise, for the medical care of the taxpayer. Section 213(e) defines the term "medical care" to include amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body.

Section 1.213-1(e)(1)(ii) of the Income Tax Regulations states that "medical care" includes payments for nursing services including nurses' board.

In the instant case, some of the services provided by the attendant are in the nature of nursing services, payments for which are deductible within the limitations of section 213 of the Code. In this case, the attendant's services in taking care of the condition resulting from the ileostomy, and in dressing, grooming, and bathing the taxpayer are such nursing-type services. However, household and other personal services are nonmedical services, payments for which are nondeductible under section 262. Rev. Rul. 58-339, 1958-2 C.B. 106. Thus, an apportionment must be made as between the time spent by the attendant in performing nursing-type services, and the time spent performing household and other personal services. The portion of the attendant's wages allocable to the nursing-type services is deductible by the taxpayer as medical expenses within the limitations of section 213. The portion of the wages allocable to household and other personal services is nondeductible under section 262.

With respect to the meals furnished the attendant, since an allocable portion of the related wages is deductible under section 213 of the Code, a similar portion of the taxpayer's out-of-pocket expenditures for the attendant's meals is likewise deductible. The deductible amount is determined by allocating food expenditures among the members of the household to find the amount of the expenditure attributable to the attendant, and by then apportioning that amount in the same manner that the wages of the attendant are apportioned as between deductible and nondeductible amounts, as described above.

With respect to the lodging furnished as part of the attendant's compensation, since the maintenance of a household is a personal expense normally incurred by a taxpayer, the lodging furnished to an attendant is not a deductible medical expense unless it can be shown that the taxpayer made out-of-pocket expenditures directly attributable to the lodging of the attendant that were in addition to normal expenditures for maintaining the household as, for example, additional rent required when the taxpayer moves to an apartment with an additional bedroom to accommodate the attendant and additional utilities attributable to the attendant. To the extent that the taxpayer can show additional expenditures for lodging for the attendant in the instant case, the taxpayer is entitled to a medical expense deduction for the lodging furnished the attendant. The additional expenditures must be apportioned in the same manner that the wages of the attendant are apportioned as between deductible and nondeductible amounts, as described above.