Getting the IRS to Soak Up Some of the Costs of Your Hot Tub 

            What if you could buy your hot tub and get the IRS to subsidize it?  Well, it’s possible if your doctor recommends frequent soaks at home!  An article in Pool & Spa News (March 31, 1999 issue) shows how to do it.            

            First, you require a written recommendation from your doctor in order to get the deduction.  Once you have acquired this, you will need to follow certain requirements: 

• It must be installed expressly to help a debilitating condition (for example arthritis) for you or for a dependent. 
• The hot tub must be designed and primarily used for medical purposes, not for general recreational use (although others are not prohibited from using it).

To calculate how much you can deduct, take this into account:

• The complete installation cost.  This does not include any aspects of the project that are trivial and/or not medically necessary, such as decorative tiling.
• The impact of the hot tub on the value of your home.  If the appraised value of the home goes up due to the installation, you will have to deduct the increase in value from your deduction.
• Whether the hot tub qualifies as a capital-improvement medical deduction.  If it does, you will potentially be able to write off the maintenance costs of the hot tub as well.

However, there are limitations:

• Please check with your accountant for Schedule A, 1040 qualification.
• If you deduct the hot tub from your taxes when it is installed, you will not be able to deduct it as a home improvement when you eventually sell the house.