Note that in general one has to exceed 7.5% of income so that RMDs will raise the minimum spent before the deduction kicks in.
Assisted living was also included in the OP and in a community or facility with multiple options (independent, assisted, etc) it may be that nothing is deductible. The key driver is the need to be there, any IRS challenge is after the fact.I can't imagine a nursing home resident who isn't there for medical reasons. The only expenses that possibly wouldn't be deductible would be laundry and salon/barber. It isn't difficult for that cost to substantially exceed 10% of income and in Oregon, because medical expenses for seniors are deductible in their entirety, there is no floor.
My guess is 75% is low, but it would be a safe planning number. When my aunt went from independent living to assisted living her deductions went from below the 7% floor to greater than her IRA withdrawals and offset her entire taxable income.Your specific needs in the NH will determine the percentage of total costs that are deductible. For rough and tough planning purposes, I'm using 75% as a guesstimate.
I'm still looking into this.
That could certainly be the case, but better to err on the low side. Additionally, I'm including in the cost of LTC the entire incremental cost DW would incur if I was[-] incarcerated[/-] a NH resident. In addition to direct payments to the facility for medically required care, DW would likely incur additional expenses related to my absence from the household which would not be deductible.My guess is 75% is low
Of course, depending on the absolute numbers, even a deductible percentage lower than 75% could have resulted in the deduction being greater than your aunt's entire taxable income.When my aunt went from independent living to assisted living her deductions went from below the 7% floor to greater than her IRA withdrawals and offset her entire taxable income.
If it helps, the proceeds of a long-term care insurance policy are generally not taxable unless the check exceeds the expenses.A guideline of 75% as allowable with nursing home/ assisted living costs being what they are in all probability means that in case we need such care in all likelihood our RMD's would not be taxable. This would make a big difference.