A roundup of odd or intriguing tax issues.
In several new cases, taxpayer claimed high-priced deductions for certain unusual expenses, with mixed results.
On the prowl for deductions. A “big game hunter” in a new case claimed a deduction of $1.45 million for animal specimens donated from his prized collection, including shoulder mounts, skins and hides, skulls, horns, antlers, hooves, ears and a set of tusks. But the IRS expert valued the total donation at only $163,000. After close examination, the Tax Court ruled that the specimens were actually commodities — not collectibles – with a limited fair market value. Therefore, it stuck with the IRS’ estimate (Gardner, TC Memo 2017-165, 8/24/17).
No place like your tax home. According to the IRS, your “tax home” isn’t necessarily the place where you reside. In a new case, a video producer who lived in Las Vegas did almost all his work at home or at a local studio. But the firm built a new facility in D.C. where he was required to edit his work. This resulted in frequent two-week trips to D.C. and he even rented a condo there. One year, he piled up more than $55,000 in travel expenses. Nevertheless, the Tax Court said his tax home was still Las Vegas, where he did most of his work (Barrett, TC Memo 2017-195, 10/2/17).
Out of body experience. A taxpayer paid in vitro fertilization (IVF) expenses so that he and his same-sex partner could have kids. In a four-year span, he incurred costs for seven procedures, three egg donors, three surrogates and two fertility specialists, totaling more than $100,000. In 2011 alone the taxpayer paid nearly $57,000 out-of- pocket for IVF-related expenses. But only the $1,500 that went toward procedures performed directly on his body—namely, blood tests and sperm collection –counted towards a medical deduction. The rest of the costs didn’t qualify as medical care (Morrissey, CA-11, 9/25/17)
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