Which property of ethanol makes it suitable for preparing medicines such as tincture of iodine?

Theproperty of ethanol that makes it suitable for preparing medicines such as tincture of iodine, cough syrups, and other tonics is its ability to act as a solvent. 

Ethanol dissolve both polar and nonpolar substances. This property allows ethanol to effectively dissolve and extract active ingredients, such as iodine in tincture of iodine or medicinal compounds in cough syrups and tonics.