There’s a lot of outlandish tax advice circulating on the internet. However, there is one incredulous-sounding claim that is actually partially true – and that’s the fact that you can deduct your swimming pool. Sometimes. As always, there are a lot of caveats and conditions that need to be met for this to be a legitimate deductible.

A swimming pool can be a qualified medical expense that is deductible on your Schedule A – under the right conditions. Some of the medical conditions that might qualify include chronic pain, musculoskeletal diseases, osteoporosis, multiple sclerosis, or if someone needs major physical therapy. Generally, the IRS does not consider someone simply trying to lose weight as a valid reason for pool installation and therefore would not allow the deduction in that case. Written documentation from a medical professional is needed to prove that your pool is necessary for your medical condition.

If your pool is used primarily for recreational purposes and only occasionally to help with your medical issues, it would also not qualify for a deduction. You also should not have access to publicly available pools that could serve the same purpose as your home pool. This includes city public swimming pools, community centers or gyms, neighborhood pools, and more.

Let’s look at an example of when this deduction is considered reasonable. In the tax court case Cherry v. Commissioner, Mr. Cherry was able to successfully defend his pool write-off for the following reasons:

  • The pool was prescribed by his doctor as the best form of exercise to aid with his bronchitis and emphysema.
  • Mr. Cherry actively tried to get to a community center to swim at that would fit with his work hours, but couldn’t.
  • Mr. Cherry utilized the pool 2x per day for exercise.
  • When Mr. Cherry traveled and was unable to swim, his breathing issues would return after 4-5 days.
  • The pool was rarely used by other family members.

In contrast, in the case of Le Beau v. Commissioner, the medical deduction for Mr. Le Beau’s pool was denied since there was no documentation to support the medical necessity for the pool outside of Mr. Le Beau saying his doctor told him to lose weight.

The interesting thing about this deduction is that the actual cost to build the pool is not what qualifies as the medical expense, it’s the cost to build the pool MINUS the increase in FMV of the home from the pool. For example, if you spend $80,000 to build a pool, and the pool adds $30,000 in FMV to your home, the actual deduction is $50,000.

Pools can not only add to the value of your property but can also be used as a wonderful resource for managing and overcoming medical issues. If your pool is eligible for a deduction, you might also be able to deduct your maintenance costs as well, depending on your circumstances. However, even if you find that your pool is not deductible as a medical expense, it could still save you money in other areas like home improvement costs. Contact a ClarkSilva member today to learn more – we can walk you through all the options available to you.