Ruby incurred substantial medical expenses ($32,000) and real estate taxes on her residence...

Question

Ruby incurred substantial medical expenses ($32,000) and real estate taxes on her residence ($8,000). Because she did not have the funds to pay these expenses, she asked her mother, Susan, to do so. Susan made the payments directly to Ruby’s creditors. On her Federal income tax return, Ruby deducted $24,500 ($32,000 – 7.5% of $100,000 AGI) of medical expenses and $8,000 of real estate taxes. The IRS disallowed these itemized deductions on Ruby’s tax return. According to its position, because Ruby did not actually pay these expenses, she is not entitled to any deductions. Evaluate the positions taken by Ruby and by the IRS.

Robert · Accepted Answer

Solution: 
In the Current scenario, Susan who is the mother of Ruby has paid the medical bills directly; 
However Susan was not obligated to pay the bills. However Ruby was and as Ruby has not paid 
the bills therefor Ruby is not entitled to claim the expenses.

Ruby incurred substantial medical expenses ($32,000) and real estate taxes on her residence ($8,000). Because she did not have the funds to pay these expenses, she asked her mother, Susan, to do so....

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