Paul L. Caron

Thursday, February 25, 2010

1st Circuit Denies Sperm Donor's Claimed Medical Expense Deduction

Following up my prior post:  the First Circuit has summarily affirmed the decision of the Tax Court (Magdalin v. Commissioner, T.C. Memo. 2008-293 (Dec. 23, 2008)) denying a sperm donor's claimed medical expense deduction, even though the Service allows (per Priv. Ltr. Rul. 2003-18-017 (Jan. 9, 2003)) the expenses of egg donation as deductible medical expenses:

Petitioner William Magdalin appeals a decision of the tax court holding non-deductible certain expenses he incurred in connection with fathering two children via in vitro fertilization of an anonymous donor's eggs with petitioner's sperm and placement of the resulting embryos in unrelated gestational carriers who gave birth to them. Petitioner stipulated in the tax court proceedings that he was not infertile and that he had had two children via natural processes with his now ex-wife.

This court reviews the tax court's factual findings for clear error and its legal conclusions de novo. ... We agree with the tax court and therefore summarily affirm its decision. As the court concluded, the various expenses incurred by petitioner were not for the treatment of any underlying medical condition suffered by the taxpayer; as noted, he stipulated that he was not infertile and that his previous children had been produced by natural processes in conjunction with the woman who was his wife at the time. In addition, the procedures were not for the purpose of affecting any structure or function of taxpayer's own body. Rather, they affected the bodies of the gestational carriers who, petitioner agrees, were not his dependents. Consequently, the tax court properly affirmed the Commissioner's disallowance of the deductions. The decision of the tax court is summarily affirmed.

Magdalin v. Commissioner, No. 09-1153 (1st Cir. Dec. 17, 2009).  See also Katherine Pratt (Loyola-L.A.), Deducting the Costs of Fertility Treatment: Implications of Magdalin v. Commissioner for Opposite-Sex Couples, Gay and Lesbian Same-Sex Couples, and Single Women and Men, 2009 Wis. L. Rev. ___,

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Also, the expenses for sperm donation are nominal. All you need is a cup and, er, well, a keen imagination. Not that I would know anything about this.

Posted by: Pete Terranova | Feb 25, 2010 10:14:49 AM