Fertility Treatment-Medical Expense

[Bonnie]

Fertility treatment to concieve--is this something that can be claimed as a medical expense? What about if a surogate is used to carry the baby? A lawyer needs to be hired to do all the legal paperwork to get a birth certificate when the baby is born? Is the cost of the lawyer a deduction? Couple who the baby will belong to will pay the deductible and co pays of the mother carrying the baby. Can they deduct this as well? Not something I see every day so just wondering?

Thanks

[AuditorTurnedGood]

Perhaps

When I was auditing for MN, we had a case of someone deducting the cost of gender reassignment surgery. We challenged it, and, as it turns out, they had several medical opinions stating the surgery was necessary for the taxpayer's health, so we allowed the deduction. The entire thing appears to hinge on medical necessity.

Pub 502 states that

"You can include in medical expenses the cost of the following procedures to overcome an inability to have children.
• Procedures such as in vitro fertilization (including Also see Lodging, later.
temporary storage of eggs or sperm).
• Surgery, including an operation to reverse prior sur- Insurance Premiums
gery that prevented the person operated on from You can include in medical expenses insurance premiums
having children."

Surrogacy, however, isn't explicitly allowed or disallowed. I would think the payments made might be deductible if the surrogate qualified as a dependant some how, but beyond that, I'm at a loss.

[New York Enrolled Agent]

From RIA, a FOIA letter from the IRS

Date: August 12, 2002


Dear [Redacted text]


In your letter of July 17, 2002, you asked whether medical and legal expenses incurred in connection with a surrogate mother and her unborn child are deductible under § 213 of the Internal Revenue Code. Although your request is not for a formal ruling, we are happy to provide you with general information.

Section 213(a) of the Internal Revenue Code allows a taxpayer to deduct the expenses paid during the taxable year, not compensated for by insurance or otherwise, for medical care of the taxpayer, the taxpayer's spouse, or the taxpayer's dependents (as defined in § 152), to the extent the expenses exceed 7.5 percent of adjusted gross income. Section 152(a) defines a dependent as (1) an individual listed in the section (2) for whom the taxpayer provided over half of the support for the taxable year.

A surrogate mother is, of course, neither the taxpayer nor the taxpayer's spouse, and typically is not a dependent of the taxpayers. Nor is an unborn child a dependent. Cassman v. United States, 31 Fed. Cl. 121 (1994). Thus, medical expenses paid for a surrogate mother and her unborn child would not qualify for deduction under § 213(a).

Under very limited circumstances, legal fees may be allowable as medical care expenses. In Gerstacker v. Commissioner, 414 F.2d 448 (6th Cir. 1969), legal expenses incurred to create a guardianship in order to involuntarily hospitalize a medically ill taxpayer were held to be deductible medical expenses because the medical treatment could not otherwise have occurred. However, legal expenses incurred in connection with a surrogate mother are typically not in connection with otherwise-deductible medical care expenses. Thus, the legal expenses likewise would not be deductible under § 213(a).

[ChEAr$]

those pesky legal fees

however MIGHT just qualify as adoption expenses for the credit, no?

OR; do we still have the adoption credit? So many things like that had a sunset
provision when passed.

[Roberts]

Surrogate parenting expenses are strictly forbidden as qualified adoption expenses.