10 October 2002 External T.I. 2002-0149235 - medical expenses-renovation

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CCRA.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.

Principal Issues: Whether renovation expenses qualify as medical expenses

Position: No, expenses do not meet the requirements set out in paragraph 118.2(2)(l.2)

Reasons: Question of fact - individual must lack normal physical development or impairment must affect mobility - severe and prolonged

XXXXXXXXXX 2002-014923
Lena Holloway, CA
October 10, 2002

Dear XXXXXXXXXX:

Re: Renovation Expenses

We are writing in reply to your letter of June 21, 2002, wherein you inquired if the costs related to the renovations of your daughter's bedroom and bathroom facilities are deductible for income tax purposes.

In your letter, you stated that your daughter qualifies for the mental or physical impairment tax credit due to her diagnosis of Tourette's Syndrome, Mood Disorder, Attention Deficit Disorder and Learning Disorder. Your letter also noted that, although she is not confined to a wheelchair, your daughter has marked physical limitations due to her height and weight. Her physical problems are further complicated by the fact that she has episodes of violent behaviour.

You have recently renovated her living space to allow her better access to her bedroom and bathroom facilities as she is unable to bathe in a normal sized facility and your family facilities are damaged beyond repair. These renovations and repairs include installations of:

? an extra large door for the bathroom;
? an extra large tall shower stall made of reinforced fibreglass and imbedded in solid concrete;
? towel racks that are fastened to the wall studs; and
? a heavy duty toilet and sink.

Written confirmation of the tax consequences that apply to a particular fact situation is given by this directorate only in the context of an advance ruling request submitted in the manner set out in Information Circular 70-6R5. Inquiries that relate to a partially completed or completed transaction should be addressed to the local Tax Services Office. Notwithstanding the foregoing, we are prepared to provide the following comments.

Comments

Section 118.2 of the Income Tax Act (the "Act") provides rules for determining the amount that may be claimed, as a tax credit, in respect of medical expenses. The credit applies to qualifying medical expenses, in excess of defined limits, incurred in any 12-month period ending in the taxation year. A person may claim his or her own medical expenses or those of a dependant or a spouse. However, the amount of the credit is gradually reduced to the extent that medical expenses are incurred for a dependant who has income in excess of the basic personal amount.

Qualifying medical expenses include reasonable expenses relating to renovations or alterations to a dwelling of a patient who lacks normal physical development or has a severe and prolonged mobility impairment if the renovations or alterations enable the patient to gain access to, or to be mobile or functional within, the dwelling.

Generally, an individual would be considered to have a severe mobility impairment where that individual's ability to perform the basic activities of daily living, such as walking or dressing oneself, is markedly restricted (e.g. the individual is confined to a wheelchair or has another immobilizing impairment such as multiple sclerosis). An impairment is considered to be "prolonged" if it has lasted, or may reasonably be expected to last, for a continuous period of at least 12 months.

The costs relating to the renovations described above would qualify as medical expenses only if your daughter lacks normal physical development or suffers from severe mobility impairment. Based on the facts provided in your letter, it appears that neither of these requirements are met.

We trust the above comments are of assistance.

Yours truly,

Daryl Boychuk, LL.B
for Director
Business and Partnerships Division
Income Tax Rulings Directorate

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