Are funeral expenses tax deductible? -- Margarita
Some people think that medical expenses include funeral expenses,
but the Internal Revenue Service does not share the same view.
expenses are the costs of diagnosis, cure, mitigation, treatment
or prevention of disease, and the costs for treatments affecting
any part or function of the body. The medical expenses must be primarily
to alleviate or prevent a physical or mental defect or illness.
Expenses related to the taxpayer's last illness qualify as medical
expenses even though the taxpayer did not survive.
However, since funeral expenses do not fit within
the treatment of the patient, they are not medical expenses.
Funeral expenses are a permitted deduction for estate
tax purposes. When a taxpayer dies and leaves a substantial
estate, the value of those assets are subject to estate tax. For
taxpayers who die in 2004, an estate is subject to estate tax if
the value of the assets after allowable deductions is more than
$1.5 million. Allowable deductions would include the funeral and
last illness expenses, debts and administration costs.