Question

11.2 Can a Swimming Pool Be a Deductible Medical Expense? Finding and Analyzing the Relevant Code Sections and Regulations and a Relevant Revenue Ruling Facts: Your clients, Holly and Greg Orman, are a married couple with two young sons, Blake (age 6) and Jonah (age 4). In late 2014, the Ormans learned that Blake has a medical condition that makes his muscles very weak. In addition to prescribing physical therapy that will include exercises to strengthen Blake's muscles, Blake's doctor suggested that swimming regularly could greatly improve Blake's muscle strength. The Ormans live in a rural area far from any public swimming pool. They are considering installing a swimming pool in the backyard at their house. However, the Ormans would like to know whether the cost of installing a swimming pool may be deductible as a medical expense for federal income tax purposes. Required: First step: Identify and properly cite the Code sections and regulations that discuss the deductibility of medical expenses. Indicate whether and, if so, where, they indicate whether the cost of a swimming pool may be deductible as a medical expense. Second step: Find and review a relevant Revenue Ruling that involves the issues of whether the cost of a swimming pool may be deductible as a medical expense. Provide a proper citation for the Revenue Ruling. Briefly describe the facts of the ruling and the IRS's reasoning and conclusion(s). Indicate whether you think the IRS would reach the same conclusion(s) in the Ormans' situation and why or why not.

Answer 1

1. Code sections and regulations that discuss the deductibility of medical expenses:

IRS publication 502 explains the itemized deduction for medical and dental expenses that can be claimed on Schedule A (Form 1040).

• It discusses which expenses and whose expenses that an individual can or cannot include in figuring the deduction
• It explains how to treat these reimbursements and how to figure the deduction
• It tells how to report the deduction on tax return

2. Indicate whether and, if so, where, they indicate whether the cost of a swimming pool may be deductible as a medical expense:

According to Publication 502:

An individual can include in medical expenses that you pay for a specialized equipment installed in a home or for improvements if the main purpose is medical care. The cost of improvements which increase property value are included partly. The cost of improvement is reduced by the increase in value of property and the difference is medical bill that can be claimed.

However, nowhere in the publication swimming pool is mentioned explicitly as an expense which can be itemized .

3. Find and review a relevant Revenue Ruling that involves the issues of whether the cost of a swimming pool may be deductible as a medical expense. Provide a proper citation for the Revenue Ruling. Briefly describe the facts of the ruling and the IRS's reasoning and conclusion(s)

Case: Richard A. Polacsek et ux., T.C. Memo. 1981-569

The taxpayer had installed a swimming pool in his backyard for $10,500 solely for therapeutic purposes necessitated by a severe operation petitioner had undergone known as "total thorasoplasty" . The pool was used constantly by petitioner which allowed him to increase his breathing power through exercise. Given the pool's sole purpose of providing exercise, it was constructed with a 4-feet dept and 14*28 feet dimensions.

The IRS allowed petitioner to deduct $6,516.26 as it deemed the pool added $4000 to the value of the estate.

I believe the IRS would allow the Ormans to deduct the cost of swimming pool net of addition to value it adds to the estate as the capital expenditure is recommended by doctor to help Blake improve muscle strength (similar to how Mr Polacsek used it for his breathing power)