||Ask the Dollar Diva
Can I deduct my pool installation?
Dear Dollar Diva,
I have scoliosis, and my doctor has recommended a swimming pool.
Is there any way to deduct any of the costs of having a pool installed?
If your doctor advises you to get a pool for general
health reasons none of it will be deductible. If he advises you
to get a pool as a treatment for a specific disease, part of it
may be deductible. The Diva will explain the rules to you.
All or part of a capital expense can be deducted as
a medical expense if it relates to a specific disease in any of
the following ways:
- mitigation (relief)
Why would only part of it be deductible?
If the capital expense increases the value of your
home, your deduction is limited to the difference between the cost
of the home improvement and the value it adds to your home. A swimming
pool or elevator would fall into this category. If your swimming
pool costs $15,000 to install, and it increases the value of your
home by $10,000, your medical deduction would be $5,000, plus all
current and future costs for operation and upkeep. This assumes
the main reason for the pool is medical care.
The Diva reminds you that the IRS only allows a medical
deduction for "reasonable costs" to accommodate a home to a disabled
condition. Don't expect to deduct a waterfall and Tiki bar.
The deduction gets taken as an itemized deduction
A of your tax return.
When would it all be deductible?
If the capital expense does not increase the value
of your home, such as a ramp for a wheelchair, then the whole thing's
How do I support the deduction?
Get a written note from the doctor prescribing the
pool and have him state the benefits you will receive from it. Remember,
it can't just be to improve your general health; it has to have
a specific therapeutic value. The Diva has no medical background,
so she doesn't know what benefit a swimming pool will provide for
someone with scoliosis. The IRS gets fussy with these kinds of deductions,
so you want to make sure you have the medical support you need to
defend your deduction.
You'll need to substantiate the value of your home
before and after you install the pool. Although not required, an
appraisal before and after the installation would be the best support.
Your local real estate agent is a good place to go for help in this
You do not attach the doctor's note or the appraisal
to the tax return you send to the IRS. It gets filed away with your
copy of the tax return so you'll have the support at your fingertips
in the event of an audit.
For more information on taking deductions for medical
expenses read the Diva's "Deduct
your car expenses" and "IRS
Publication 502, Medical and Dental Expenses."