I looked into the deductability of MR pretty closely when I was considering (briefly) buying in a community with about $3500 a year of MR. The rules are complex, and come down to what the MR is paying for. HOWEVER, that said, I too have never come across anyone in SD who is not deducting their full MR, just like mort. interest, on their taxes. I also asked my tax guy and he just rolled his eyes and said he has never seen it not deducted, nor has he seen anyone given a hard time by the IRS over it. He said the reality is that the IRS probably could not figure out if a specific case actually qualified or not, and there are easier things to go after.
But all this is just my observations, so of course get professional advice and make up your own mind.
