Crazy Tax Deductions
By Sara Poe, CPA
Owner, Lightning Tax Services, LLC
• Chesty Love wanted bigger tips, so she went bigger with Breast Augmentation. So Chesty paid for breast implants that would give her a bra size of 56-FF.
Then on her tax return she wrote off the surgery, but the IRS said it was nondeductible cosmetic surgery. However, in Hess v. Commissioner, the Tax Court allowed tax benefits, allowing her to claim the implants as depreciable assets, a type of stage prop.
• Bruce hired his live-in girlfriend to buy furniture, manage repairs at rental properties, and to run his personal household. Then he took the deduction of her payroll for $9,000, and the IRS denied his deduction, but according to the Tax Court they allowed $2,500 of the $9,000 was allowed as a business expense. The remainder was disallowed because she was cooking and cleaning his home.
• Home office deductions can be notoriously scrutinized, so when a taxpayer deducted the home landscaping as part of his home office deduction the IRS denied his deduction. But in Langer v. Commissioner the taxpayer was allowed the deduction because he met clients in his home office, and kept up the place to make it suitable.
• Most babysitting fees are personal, but Mrs. Kingsley hired a sitter so she could do volunteer work and she deducted the sitter fees on her tax return as a charitable contributions. Well the IRS denied the deduction, but she won in Tax Court Kingsley v. Commissioner, T.C. Summ. Op. 1978-74.
• I would love to deduct a new swimming pool at my home. In Cherry v. Commissioner, this tax-payer did get to deduct a new swimming pool as a legitimate medical expense. The taxpayer had emphysema and installed a swimming pool after his doctor ordered an exercise regimen. The primary purpose of the pool was medical care. The deduction also covered part of the cost of heating the pool, pool chemicals, and a proportionate part of insuring the pool area.
If you have a crazy deduction that you will need help with on your tax return, give Lightning Tax Services a call for help at 770.545.8841 or info@LightningTaxServices.com.
Sara Poe is a Certified Public Accountant with over 20 years of experience and owner of Lightning Tax Services, LLC and Poe’s Accounting Services, LLC. Services include Tax Preparation (business and personal), Bookkeeping, Payroll, and Quickbooks management and training.