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TITLE 26-INTERNAL REVENUE CODE (1) for the production or collection of income; (2) for the management, conservation, or maintenance of property held for the produc- tion of income; or (3) in connection with the determination, collection, or refund of any tax. (Aug. 16, 1954, ch. 736, 68A Stat. 69.) DENIAL OF DEDUCTION FOR AMOUNTS PAID OR INCURRED ON JUDGMENTS IN SUITS BROUGHT TO RECOVER PRICE INCREASES IN PURCHASE OF NEW PRINCIPAL RESIDENCE No deductions to be allowed in computing taxable income for two-thirds of any amount paid or incurred on a judgment entered against any person in a suit brought under section 208(b) of Pub. L. 94-12, see sec- tion 208(c) of Pub. L. 94-12, set out as a note under section 44 of this title. CROSS REFERENCES Adjusted gross income as gross income minus, among others, expenses for production of income, see section 82 of this title. Trade or business expenses deductible, see section 162 of this title. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to In sections 62, 163, 164, 183, 263, 265, 267, 274, 404, 691 of this title. § 213. Medical, dental, etc., expenses (a) Allowance of deduction There shall be allowed as a deduction the fol- lowing amounts, not compensated for by insur- ance or otherwise- (1) the amount by which the amount of the expenses paid during the taxable year (re- duced by any amount deductible under para- graph (2)) for medical care of the taxpayer, his spouse, and dependents (as defined in sec- tion 152) exceeds 3 percent of the adjusted gross income, and (2) an amount (not in excess of $150) equal to one-half of the expenses paid during the taxable year for insurance which constitutes medical care for the taxpayer, his spouse, and dependents. (b) Limitation with respect to medicine and drugs Amounts paid during the taxable year for medicine and drugs which (but for this subsec- tion) would be taken into account In computing the deduction under subsection (a) shall be taken into account only to the extent that the aggregate of such amounts exceeds 1 percent of the adjusted gross income. [(c) Repealed. Pub. L. 89-97, title I, § 106(d)(1), July 30, 1965, 79 Stat. 337] (d) Special rule for decedents (1) Treatment of expenses paid after death For purposes of subsection (a), expenses for the medical care of the taxpayer which are paid out of his estate during the 1-year period beginning with the day after the date of his death shall be treated as paid by the taxpayer at the time incurred. (2) Limitation Paragraph (1) shall not apply if the amount paid is allowable under section 2053 as a de- duction in computing the taxable estate of the decedent, but this paragraph shall not apply if (within the time and in the manner and form prescribed by the Secretary) there is filed- (A) a statement that such amount has not been allowed as a deduction under section 2053, and (B) a waiver of the right to have such amount allowed at any time as a deduction under section 2053. (e) Definitions For purposes of this section- (1) The term "medical care" means amounts paid- (A) for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body, (B) for transportation primarily for and essential to medical care referred to in sub- paragraph (A), or (C) for insurance (including amounts paid as premiums under part B of title XVIII of the Social Security Act, relating to supple- mentary medical insurance for the aged) covering medical care referred to in subpar- agraphs (A) and (B). (2) In the case of an insurance contract under which amounts are payable for other than medical care referred to in subpara- graphs (A) and (B) of paragraph (1)- (A) no amount shall be treated as paid for insurance to which paragraph (1)(C) applies unless the charge for such insurance is either separately stated in the contract, or furnished to the policyholder by the insur- ance company in a separate statement, (B) the amount taken into account as the amount paid for such insurance shall not exceed such charge, and (C) no amount shall be treated as paid for such insurance if the amount specified In the contract (or furnished to the policy- holder by the Insurance company in a sepa- rate statement) as the charge for such in- surance is unreasonably large in relation to the total charges under the contract. (3) Subject to the limitations of paragraph (2), premiums paid during the taxable year by a taxpayer before he attains the age of 65 for insurance covering medical care (within the meaning of subparagraphs (A) and (B) of paragraph (1)) for the taxpayer, his spouse, or a dependent after the taxpayer attains the age of 65 shall be treated as expenses paid during the taxable year for insurance which constitutes medical care if premiums for such insurance are payable (on a level payment basis) under the contract for a period of 10 years or more or until the year in which the taxpayer attains the age of 65 (but in no case for a period of less than 5 years). (4) The determination of whether an indi- vidual is married at any time during the tax- able year shall be made in accordance with the provisions of section 6013(d) (relating to determination of status as husband and wife). (f) Exclusion of amounts allowed for care of certain dependents Any expense allowed as a credit under section 44A shall not be treated as an expense paid for medical care. Page 193 § 213