Deduction Case Study

According to section 213, in relevant parts, provides as follows: (a) Allowance of deduction -There shall be allowed as a deduction the following amounts, not compensated for by insurance or otherwise- the amount by which the amount of the expenses paid during the taxable year for medical care of the taxpayer, his spouse, and dependents exceeds 3 percent of the adjusted gross income. (e) Definitions -For purposes of this section- the term "medical care" means amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body. Since Jack will specifically use the pool to treat his back, categorizing the pool as a medical expense deduction is valid. Reg. 213 permits a deduction for certain medical expenses. A deduction is allowed only to individuals and only with respect to medical expenses actually paid during the taxable year, regardless of when the incident or event which occasioned the expense occurred and regardless of the method of accounting employed by the tax payer in making the income tax return. This regulation exemplifies that Jack can claim the swimming pool under his deduction because he acquired the swimming pool during the taxable year even though the …show more content…
In the court case Ferris v. Comm, the court overruled deducting the swimming pool as a medical expense because installing the swimming pool added value that exceeded the swimming pool cost. Installing the swimming pool can be deducted as a medical expense, but if it adds values the amount to be recognized as a deduction expense is the cost of the swimming pool less the value added to the house. In Hebert Cherry court case the amount use to build and maintain the swimming pool was considered a medical expense deduction because it was strictly used for physical