5 strange-but-true tax deductions
Updated On: Mar 12 2013 08:39:20 AM CDT
With tax day right around the corner, you've got plenty of company if you're turning over every single rock in search of every last tax break you can find.
You likely already know all about the usual write-offs -- medical expenses, charitable donations, student loan interest, etc. -- but some filers get pretty creative with their deductions when it comes to tax time.
And don't think the government always says "no."
U.S. Tax Court decisions are littered with such seemingly strange deductions as depreciated ostriches, babysitting fees, Bermuda business conventions and clarinet lessons as overbite treatments.
But even those deductions are nothing compared to our choices for the five weirdest tax deductions ever successfully claimed. As you race to finish up your own taxes this year, read on for inspiration.
No. 5: Cat food
More than a few people have attempted to write off the cost of pet food only to find the IRS pretty skeptical claiming the cost of Fido's kibble as a business expense.
But then there's Samuel and Carol Seawright of Columbia, S.C. In 2000, they took the IRS to court over their 1995 tax return. While the court mostly sided with the IRS, it did allow the Seawrights' $300 deduction for cat food.
Why the feline write-off where so many others have fallen short? Because the Seawrights, owners of a scrap yard, used the food to attract wild cats in order to keep snakes and rats out of their property.
Again, the court's decision went against the couple on most claims, so the $300 allowance likely was a hollow victory, but when it comes to taxes sometimes you've got to take what you can get.
No. 4: Swimming pool
If you're planning on putting in a backyard swimming pool for the family this summer, don't expect the IRS to fall all over itself approving your costs as a deduction.
That is, unless you can show the pool was a necessary medical expense.
Kiplinger.com tells the story of an elderly man diagnosed with emphysema who built a new pool after doctors ordered him to get more exercise. Arguing that his family rarely used the pool and that swimming daily improved his health, he claimed the pool's primary purpose was for medical care.
After initially being shot down by the IRS, the man saw the courts side with him, allowing the cost of the pool (to the extent it exceeded the amount it added to the property value) as a deduction.
Not only that, but he was able to claim the pool's operating costs, including chemicals, electricity, insurance and repairs, as medical expenses as well.
No. 3: Breast implants
Before this example gets your hopes up, understand that if you're counting on deducting that nose job or face lift, you're likely to be disappointed.
The IRS generally does not consider most cosmetic surgeries deductible -- except in certain specific scenarios. Which brings us to exotic dancer Cynthia Hess.
In 1994, Hess, who went by the stage name "Chesty Love," sued the IRS in order to take a $2,088 tax deduction for a breast augmentation procedure that left her with a size 56FF chest. Hess claimed the procedure was a work-related expense undertaken purely to advance her career.
Noting that Hess' new breasts weighed 10 pounds each and were so cumbersome that she could not derive personal benefit from them, U.S. Tax Court judge Joan Seitz Pate agreed, allowing her to deduct the expense as a "stage prop."
No. 2: Body oil
Exotic dancers aren't the only professionals who can claim odd items as work-related tax deductions. Consider the world of professional bodybuilding, for instance.
In 2004, Wisconsin bodybuilder Corey L. Wheir filed suit against the IRS after the agency denied his deductions for bison meat, supplements and oil and tanning products.
Wheir pointed to the high-protein meat and other items, including ProTan Muscle Juice Professional Posing Oil, which he applied to his body prior to going on stage, as business expenses.
While the court found the meat and supplements to be a personal expense because they could be consumed by anyone, they did grant the Dairyland bodybuilder his other write-offs. In its written decision, the court declared the oils and tanning products deductible because they were marketed only through bodybuilding magazines and were not generally for sale through "normal marketing outlets."
No. 1: Free beer
Businesses come up with all kinds of novel ways to attract customers, but perhaps no promotion was as inspired as that of the gas station owner who gave his customers free beer.
In the 1982 case of Sullivan v. Commissioner, the U.S. Tax Court allowed a service station operator to deduct the cost of beer he offered to his customers free of charge while their vehicles were being filled with gasoline or serviced.
The court stated that a small business owner "can offer free beer to beer lovers" to improve business. Such an offering was a legitimate business expense and, thus, tax deductible, according to the court.
Of course, the court didn't weigh in on the wisdom of letting your customers chug beer before driving away from the pumps.
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