Magdalin v. Commissioner - No. 7880-07, 2008 Tax Ct. Memo LEXIS 292 (T.C. Dec. 23, 2008)

Rule:

The term "medical care" includes amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body. 26 U.S.C.S. § 213(d)(1)(A). The regulations provide that deductions for expenditures for medical care allowable under 26 U.S.C.S. § 213 will be confined strictly to expenses incurred primarily for the prevention or alleviation of a physical or mental defect or illness. Sec. 1.213-1(e)(1)(ii), Income Tax Regs. Section 213(d)(1)(A) requires a causal relationship in the form of a "but for" test between a medical condition and the expenditures incurred in treating that condition. The "but for" test requires petitioner to prove (1) that the expenditures were an essential element of the treatment and (2) that they would not have otherwise been incurred for nonmedical reasons.

Facts:

Petitioner taxpayer entered into agreements under which anonymous donors were to donate eggs to be fertilized with the taxpayer's sperm and transferred to a gestational carrier. He also entered into agreements in which women agreed to become impregnated through the embryo transfer process with the embryo created from the anonymous donors' eggs and the taxpayer's sperm and to bear children for the taxpayer. At all relevant times, his sperm count and motility were found to be within normal limits. The taxpayer deducted expenses incurred relating to the agreements. Respondent Commissioner of Internal Revenue disallowed deductions for medical expenses claimed by the taxpayer under 26 U.S.C.S. § 213(a). Petitioner appealed. 

Issue:

Was the plaintiff entitled to deduct the medical expenses he incurred in fathering children through unrelated gestational carriers via the in vitro fertilization of an anonymous donor's eggs? 

Answer:

No.

Conclusion:

The court held that expenses incurred in the absence of the requisite underlying medical condition or defect and that did not affect a structure or function of the taxpayer's body were nondeductible personal expenses within the meaning of 26 U.S.C.S. § 262. The court held that the expenses the taxpayer sought to deduct were not paid for medical care under § 213(d)(1)(A) because none of the expenses were incurred primarily for the prevention or alleviation of a physical or mental defect or illness and because the expenses did not affect a structure or function of his body.