Medical Expenses - International Travel

[superwoman]

Hello,

I have a client that went to a foreign country for a medical procedure. The TaxBook indicates transportation as allowable deductions (4-5 & 4-6) but doesn't identify whether it is allowable for both domestic and international transportation for medical procedures.

Please advise. Thanks!

[Burke]

He can deduct it as long as it is a legal procedure in the United States. Same for drugs. If they can be legally purchased in the US and they are bought overseas, they can be deducted. I would not go for the travel expense, however, since he could have had it done here. If it could not have been done here legally, there is no deduction allowed.

[superwoman]

He can deduct it as long as it is a legal procedure in the United States. Same for drugs. If they can be legally purchased in the US and they are bought overseas, they can be deducted. I would not go for the travel expense, however, since he could have had it done here. If it could not have been done here legally, there is no deduction allowed.

Thank you...the procedure is legal here in the US (it's IVF). I appreciate it!

[Burke]

To clarify my response, I thought your initial question was the deductibility of the procedure. It appears you were asking about the transportation. That, I would be hesitant to take, since he could have gotten the procedure done in the US. Perhaps some one can give a cite.

[joanmcq]

I'd take it. I'm going to guess the cost, even with the transportation costs, is a lot less than they would have paid for the procedure in the US.

[JohnH]

I tried to do a little checking on this, including reading on a site which sponsors "Medical Tourism". Nobody knows whether this is a legitimate deduction or not, as far as I can tell. Costs for transportation are deductible, including airfare, but there is nothing which restricts the travel to "US only", yet nothing which permits travel out of the country. And the cost of travel for someone to accompany the patient is permissible as well. The only restriction I can find is that lodging cannot exceed $50 per day. And of course the procedure cannot be illegal, cosmetic, etc.


I had a friend who got his teeth cleaned on a mission trip to India back in mid-January, but the issue of whether it might be tax deducible never came up. Probably because it only cost him about $20. (and we were told the dentist probably overcharged him because he is American)

[ATSMAN]

I think one can defend the airfare, hospital and doctor fees etc. But how do you defend the "Tourism" component? I know these packages are "all inclusive price" deals most of the time. When was the last time a US Hospital sent you to Disney World after an operation on their pre paid invoice?

[JohnH]

It's an interesting question - I don't now the answer. I suppose if one can establish that the primary purpose of the travel is for the medical procedure, then there would need to be some allocation to separate out the "tourism" side, if there is any. If you read some of the Medical Tourism sites, you'll see that they focus mainly on the medical and not so much on the tourism aspect. Maybe that's just marketing.

Given what's happening in the healthcare arena in this country, this might become a bigger issue in future years and IRS will have to begin issuing some guidance.

[Koss]

Foreign Medical Expense and Travel

Burke wrote:

I would not go for the travel expense, however, since he could have had it done here.

and also wrote:

It appears you were asking about the transportation. That, I would be hesitant to take, since he could have gotten the procedure done in the US.

I have to respectfully disagree. People often travel great distances, at great expense, within the US, to get treatment from a specialist, even though similar or identical treatment is available in their area, from a different provider. That kind of travel is deductible. I don't see why travel for medical treatment would be nondeductible just because the person chose a provider in another country.

I agree with others who have commented that the treatment must be the primary purpose of the trip. This would in fact disqualify a lot of "medical tourism." IRS Publication 502 says that you cannot deduct the cost of "travel for purely personal reasons to another city for an operation or other medical care." And you can deduct the cost of lodging only if "there is no significant element of personal pleasure, recreation, or vacation in the travel away from home."

Clearly, this excludes some cases that would strain credibility. If I take a trip to visit my family, and while there, I have some routine dental work done, that doesn't transform the travel into a deductible expense.

Burke also wrote:

He can deduct it as long as it is a legal procedure in the United States... If it could not have been done here legally, there is no deduction allowed.

I'm not sure I agree with this, either. It's not an issue in this case, since the original post says that the procedure in question is in fact legal here in the US.

But I think it is an interesting theoretical question, since there are many procedures that are legally available abroad that are not available here in the US.

IRS Publication 502 specifically addresses medicines purchased from other countries. It does say that even if you purchase a medicine and consume it while you are in another country, the cost is deductible only if the medicine is legal in both the US and the other country.

But Publication 502 does not appear to address medical procedures that are legal in another country, but not here in the US.

I would be interested to see any authority or citation for the claim that a procedure performed abroad must be legal in the US in order to be deductible.

Pub. 502 does say that any treatment must be performed by a licensed provider, and that the treatment must be legal. So an illegal procedure is not deductible, even if performed by a licensed physician, and a legal procedure is not deductible if it is performed by someone who is not properly licensed. But nowhere does it address procedures performed in another country. It simply says that the procedure must be legal. If it is legal in the place where the procedure is performed, and it is performed by a licensed provider, then I think it is deductible.

I'm not sure one can even define whether a procedure is "legal" here in the US. There are a few procedures--a very few--that are actually illegal, such an abortion in the third trimester. But even that sort of thing varies from one state to another. The practice of medicine is largely regulated by the states--not by the federal government. There are many procedures that are not approved by the FDA here in the US. But that's not the same as saying that a procedure is illegal.

Here's an article on this topic by a well-known tax attorney who writes a blog for Forbes. She does not address the question of whether one could take a deduction for a procedure that was approved in another country but not in the US. But she offers her opinion on both the medical expense and the travel.

http://www.taxgirl.com/ask-the-taxgirl-foreign-medical-expenses/

BMK

[Burke]

IRS Publication 502 specifically addresses medicines purchased from other countries. It does say that even if you purchase a medicine and consume it while you are in another country, the cost is deductible only if the medicine is legal in both the US and the other country.

But Publication 502 does not appear to address medical procedures that are legal in another country, but not here in the US.

Pub. 502 does say that any treatment must be performed by a licensed provider, and that the treatment must be legal. So an illegal procedure is not deductible, even if performed by a licensed physician, and a legal procedure is not deductible if it is performed by someone who is not properly licensed.
BMK

The posters above have made some good points about the travel, and you have talked me into it as a legitimate deduction if it can be ascertained as the primary reason for the trip. However, Pub 502 does seem to state unequivocably that the procedure is not deductible if it is not legal. Since the IRS cannot police other countries, it makes sense that they mean legal in the US. I can't see them exempting procedures, and not drugs. However, I can find nothing in Sect 213 that addresses procedures in this regard. It seems only drugs are so classified in the code.