Quote Originally Posted by oladub View Post
Getting to the scam part. The entire cost, the prorating of the original $80,000 and the monthly fees were considered by tax law to be medical expenses and the higher income one was, the more they could deduct from their federal income taxes. Think of it like this - If someone paid $2,000/month and were in the 15% income tax bracket, they could deduct $3,600/year. If they were in a 37% income tax bracket, they could deduct $8,880 from their annual income tax for the same 'medical' expenses. The higher income one was, the more they could deduct from their income taxes. It made me wonder how many other little hidden tax advantages wealthy people have that middle income people never bump into.
Except that one can only deduct medical expenses in excess of 7.5% of one's adjusted gross income.