Case Study Jane Lane

Summary of Facts

Our client Jane Lane is requesting counsel regarding a question of deductions for a swimming pool, and the claim of a medical expense to alleviate her of the liability of the cost due to a severe medical condition. Jane suffers from degenerative arthritis, her doctor has recommended that she swim at least one hour a day, but there are no swimming pools near her home. In light of this adverse truth, she spent fifteen thousand dollars to have a pool installed in her backyard, and the expense increased the market value of her home by five thousand dollars.

According to the definition of a medical expense in §213 of the Internal Revenue Code, she is entitled to a deduction, because of the following: (1) Jane’s severe degenerative

The primary use of the pool is for medical use more than fifty percent of the time. According to Sec. 1.213-1(e)(1)(ii) from the Income Tax Regulations: “An expenditure for medical care is deductible if it is strictly confined to expenses incurred primarily for the prevention or alleviation of a physical or mental defect or illness.” (1) This restriction can have deep implications and can easily cause troublesome scenario if her activity is not appropriately logged. Furthermore, the Tax Court will expect to see records that verify the pool’s usage, and if deemed to fall below the fifty percent threshold for “primary” use for medical care, Jane will not be able to claim the medical expense deduction.

In a related case FERRIS v. COMMISSIONER, Mrs. Ferris was diagnosed with degenerative spinal disorder, which caused her serious difficulty in walking or sitting. Upon recommendation by her physician, they installed a swimming pool, and use it twice a day to prevent early onset of permanent paralysis. The Tax court made a mistake in determining what percentage of the cost of construction was deductible, but the focus in this case is “The deductible amount is the minimum reasonable cost of a functionally adequate pool and housing structure on that amount was incurred medical care”