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Can I Deduct a Pool as Medical Expenses?

Can I Deduct a Pool as Medical Expenses?

People could deduct all kinds of crazy expenses from their tax returns, like the depreciation on ostriches and the cost of clarinet lessons. And yes, people have been successful in deducting a swimming pool as a medical expense. If you plan to experiment, it's a good idea to speak with a certified public accountant (CPA) or a tax professional first to make sure you don't go inviting an audit on yourself. You need to be able to prove that your new swimming pool is truly a medical expense.


What you need to know about the immediate deduction of a capital expenditure

Capital expenditure refers to money spent on the acquisition and/or maintenance of fixed assets. This generally applies to swim pools, as they are designed for long term use (compared to office supplies, for example). The IRS says it can't immediately deduct capital expenses. Instead, it would be best if you deduct the cost over the useful life of the asset. However, there is an exception for medical bills; as long as the expense is specific and entirely for medical purposes, you can immediately deduct the cost. Even better, no recapture tax applies to this exclusion. That is to say if you bought a pool for medical reasons, but your health improves, and you carry on using the pool, you won't have to pay a recapture tax.

 

How much can I deduct?

Although the pool is for medical purposes, its construction will increase the value of your home. You will need to calculate this amount in dollars before making the deduction. Here is an example:

John builds a swimming pool with a total construction cost of $ 30,000. The swimming pool increases John's home's value by $ 20,000, which leaves John with a difference of $10,000. Hence, John can deduct $ 10,000 for medical expenses.

Most people who claim a swimming pool as a medical expense will deduct the difference between the cost and the home improvement value. However, there may be some circumstances where a person can deduct 100% of the cost.


When can you deduct 100%?

The Internal Revenue Service (IRS) will allow you to deduct 100% of medical bills with little or no medical value. For example, suppose Janet had a car accident that left her in a wheelchair. She has to pay a contractor to lower the kitchen cabinets to enable her to access it. Indeed, there is no conceivable reason to do so except for medical purposes, so the IRS would likely allow a 100% deduction. As you can imagine, this exception is much more difficult to claim for a swimming pool as others in the house may benefit from it for non-medical purposes. You can do this if the group is very specialized or medically personalized, but you should first speak to a tax professional about it.


How to deduct operating costs

The costs of operating and maintaining a swimming pool can be quite high, especially if you pay to heat it. You can deduct these operating and maintenance costs when using the pool for medical reasons, but remember to keep all receipts. Here are some examples of potentially deductible costs:

  • Electricity (partly used only for the swimming pool)

  • Pool chemicals and test strips

  • Pool cover

  • Repairs

  • Swimming pool equipment

  • Winter preparation costs


How to prove that the swimming pool is a necessary medical expense

Before you claim a swimming pool on your taxes, you need to ensure that the IRS approves it or that it will be approved. You must demonstrate that the swimming pool is directly related to your medical treatment and that the swimming pool is primarily used for medical treatment. The court has already ruled in favor of the deduction for a fund that meets the following criteria:

  • Acquired after diagnosis.

  • The doctor recommended.

  • The patient investigated cheaper alternatives before purchasing the pool.

  • The patient used the pool regularly (twice a day, every day).

  • The patient's family members only used the pool occasionally.

The pool's deduction is more likely to hold water if you have special medical facilities, such as a wheelchair ramp for entry.


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