10 August 1999 Internal T.I. 9919487 - MEDICAL EXPENSES - APT RENOVATIONS

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 Department.

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

Principal Issues: Whether renovations to a rented apartment building would qualify under 118.2(2)(l.2)

Position: Yes

Reasons: There is no restriction in the law that the taxpayer's dwelling be owned.

								August 10, 1999

St. John's Taxation Centre				HEADQUARTERS
								John Oulton
      Attention:  Annette Joyce
      Preassessent Review Unit
								1999-000302

Medical Expense Tax Credit - Renovations to a building

This is in response to your July 13, 1999 memorandum concerning an enquiry you have on the application of paragraph 118.2(2)(l.2) of the Income Tax Act (the Act) in the following situation:

The taxpayer has a child in a wheelchair (disability has already been determined to be legitimate). The child is now attending university away from home and expects to attend that university over the next 4 or 5 years. Renovations in the amount of $13,OOO were made to an apartment to accommodate the child. Although it is not known, there is some concern that the child may not return to live in the apartment after the university years. You ask what the Department's position is with regard to renovations to a temporary dwelling i.e. an apartment (presumably you mean rented). Although you can see no requirement in the Act that the dwelling be permanent or temporary, you wanted our views on whether such extensive renovations would be allowable for a temporary period of time.

Our comments

In order for reasonable expenses relating to renovations or alterations to a dwelling of the patient (the child) to qualify as a medical expense under paragraph 118.2(2)(l.2) of the Act, they must be amounts paid to enable the patient to gain access to, or to be mobile or functional within, the dwelling. In our view, the taxpayer's medical expense claim for the child should not be denied solely on the basis that the particular dwelling was a rented apartment building, since, as you correctly pointed out, there is no support in the law to make such a restriction.

For your information a copy of this memorandum will be severed using the Access to Information Act criteria and placed in the Legislation Access Database LAD) on the Department's mainframe computer. A severed copy will also be distributed to the commercial tax publishers for inclusion in their databases. The severing process will remove all material that is not subject to disclosure,including information that could disclose the identity of the taxpayer. Should your client request a copy of this memorandum, they can be provided with the LAD version, or they may request a copy severed using the Privacy Act criteria, which does not remove client identity. Requests for this latter version should be made by you to Jackie Page at (819) 994-2898. The severed copy will be sent to you for delivery to the client.

John Oulton
For Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate