Writing of the cost of a pool?

Question

I have heard that it would be possible to deduct the cost of a pool for medical reasons. I have a medical condition that warrents water tharepy. What would I need to do to qualify for this write off and how would I go about it?

Let's say my AGI is about $70K and I can put a pool in for about $30K. How will this effect my taxes? Will it just bring my AGI down to $40K? Or, will I be able to recoup that money in some way? Trying to figure out if I can do this and how I can pay for it, because I don't have $30K sitting around. Can I write off the payments for a loan to install the pool? What about the surrounding landscaping? I've read somewhere that you could write off the landscaping around a wheelchair ramp along with the cost of the ramp. Does that apply to landscaping around the pool?

Thanks in Advance for you Advice!

Answer 1

You would need to get your doctor to write that the pool is needed for medical reasons. And what you would be able to deduct would be the difference between what the pool would cost to put in, and what the value of your home would increase. If the pool cost $30K and the value of your home goes up $20K then you would be able to deduct only the $10K difference. And where you would have to put the deduction would be on Schedule A - Itemized Deductions under medical expenses. Writing off the payments for the loan would not be deductible, because then you would be taking the deduction twice. Once for the cost of the pool, and the 2nd time for paying for the cost of the pool. You might be able to deduct the interest that you pay on the pool loan. Surrounding landscape would not be deductible, as there would be no medical reason for the landscaping.

Answer 2

Your medical condition would need to be documented. It could not be a short-term condition. A person with polio needing water therapy would qualify. A person with a broken limb which will eventually heal would not qualify.

If the pool adds to the value of your home, you can deduct the cost of the pool minus the increase in value to your home. The cost of the pool is also added to the basis of your home.

If your income is $70K and the pool costs $30K and the increase in value to your home is $20K, your medical deduction is $10K, but is limited to the excess of 7.5% of your AGI. So your deduction is 10,000 - .075(70,000) or $4,750 assuming you had no other medical deductions. The tax savings might be $1,000. Not exactly a bonanza.

If you had to install a handicap ramp or lift, that cost would be fully deductible as part of your medical expenses, as it does not add to the value of your home. The part of the costs of maintaining the pool for your medical purposes would be deductible as medical expenses.

Decorative landscaping, luxury features such as submerged lights, waterfalls, tile linings, would not be deductible.

If you take out a home loan to pay for the pool, the interest on the loan may be deductible as mortgage interest. Since the pool is an improvement, and the loan is secured by the property, it would be considered acquisition debt and would only be subject to the $1 million limit.

Answer 3

A pool for medical reasons would be deductible less the increase in the value of your home.

For example: If you paid $30,000 for the pool but your house increased in value $25,000 because of the pool, only the difference ($5000) would be deductible. If your home went up in value $30k or more because of the pool, you would get no deduction.

A realtor familiar with your area could give you an estimate of the increase in value of the home after the pool is added.

Loan payments are never dedutible for anything. If you were to use home equity loan to finance the pool, the interest would be deductible.

Answer 4

First, I would advise you to have a written note from a doctor which says it's necessary for your health to have a pool so you can improve your health. Once you have it, all the costs associated with the pool(i.e, cost of the pool itself and cost to install it) become your medical deduction. Medical deduction are itemized deduction. These deductions are subject to 7.5% of AGI. So in your situation, your medical itemized deduction will equal $34,750(40,000-5,250floor).
I am not sure about landscaping. I am almost sure it's not deductible as a medical expense(at least I wouldn't push an envelope with IRS).