Question

Ban Vallew has a son, Katt, by a previous marriage. Ban’s ex-wife has custody of Katt. Katt Vallew has a history of emotional problems, for which he has seen a psychiatrist for several years. This year he has become so disturbed, manifesting violence at home and school, that he was enrolled in a special school in Arizona for problem children. Ban pays Katt’s school expenses, $3,000 per month. Ban would like to determine whether he is entitled to the medical-expenses deduction for the cost of sending his son to this school.

a. List as many possible tax research issues as you can to determine tax treatment(s) available to Ban on the payments to the school.

b. After completing your list of tax research issues, list the keywords you might use to construct an online tax research query.

Answer 1

a.          1.        Are expenses associated with emotional illnesses considered "medical" expenses?

2.         Does Katt need to be a claimed as a dependent in order for Ban to be able to take a deduction?

3.         Was the special school recommended, or "prescribed," by a doctor?

4.         Does the school have special programs which relate specifically to Katt's medical problems?

5.         What is Ban's projected medical expense floor and what other medical expenses does Katt anticipate?

6.         Are there any provisions in the divorce decree which would impact Ban's right to the deduction?

7.         What portion of the expense can be considered "educational" as opposed to "medical"?

b.         Examples of key words:

• School
• Deduction
• Medical
• §213
• Psychiatrist
• Dependent
• Emotional illness
• Prescription
• Special education