Tuesday, September 6, 2011

TaxProf Blog: WSJ: Unleashing Deductions for Your Pets

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September 4, 2011

WSJ: Unleashing Deductions for Your Pets

Wall Street Journal, Unleashing Deductions for Your Pets, by Laura Saunders:

A self-described "cat lady" named Jan Van Dusen from Oakland, Calif., in June won a Tax Court decision against the IRS that broadened the scope for deducting animals on tax returns.? Ms. Van Dusen had taken a charitable deduction for unreimbursed expenses for the care of feral cats for a nonprofit group. The IRS rejected the deduction, and the Tax Court sided with Ms. Van Dusen. The IRS has about three more months to appeal, and a spokesman declined to say whether it would. ...

The Van Dusen case has resounded in tax?and pet?circles for most of the summer, and got Tax Report to thinking: What are some other ways people can deduct their pets?...

? Moving expenses ... may include the cost of moving a pet. See IRS Pub. 521 at irs.gov.

? Estate expenses ... The cost of maintaining a pet while an estate is being settled may be deductible if the animal has monetary value, such as a purebred dog. The expenses also may qualify if the animal provides security for property.

? Business expenses. The costs of acquiring and maintaining animals used in a business?say a guard dog or a cat that keeps rats in check?may be deductible as long as the company can show they are "ordinary and necessary" costs of doing business. ...

? Service animals. The cost of acquiring or caring for a service animal such as a guide dog or hearing cat is eligible for a medical deduction.

September 4, 2011 in Tax | Permalink

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