Discussion:Therapy dog deductions

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Discussion Forum Index --> Advanced Tax Questions --> Therapy dog deductions


Discussion Forum Index --> Tax Questions --> Therapy dog deductions

Jojodevries (talk|edits) said:

12 July 2010
Tax deduction of Therapy dog

I have a client that is a therapist and wanting to buy a therapy dog. These dogs are specially trained to assist people in distress, offering a soothing tool for the person's mind and body The dog would also be kept at their home when not working. How much if any of the expenses of purchasing the dog and maintenance can be written off? 7

DaveFogel (talk|edits) said:

13 July 2010
Specifically, what "work" will the therapy dog be doing? Will the therapy clients take the dog home with them? Or will the dog be used in therapy sessions with clients? Will the therapist be charging clients for the dog's assistance?

CrowJD (talk|edits) said:

13 July 2010
I'm not sure a therapist would qualify for a therapy dog. Does the therapist need therapy?

Sigmund Freud for instance was a nut. His wife literally put the toothpaste on the toothbrush for him. To call him spoiled (and frankly selfish) would be the understatment of all time. So it's easy to have it all together when you are waited on hand and foot! lol.

So, yes if your client is a nut, she can probably qualify for the dog but another doctor will have to write her a note (they usually have the patient shake their head back and forth to see if any marbles are loose).

P.S. Now if the dog is going to be used with her patients, that is a working dog. You'll need all kinds of permits for that, animal cruelty inspections and so on.

The dog can't be worked for more than 6 hours a day, and has to have a 20 minute break every 2.5 hours.

So yes, if this is an ordinary and necessary business expense, then it's deductible, but ONLY the percentage used for business. So if the dog helps the therapist from going insane (i.e. bonkers), you can't write off that portion, ONLY the portion used on patients.

As far as food, the dog is responsible for buying his own food, like all employees.

TTMM (talk|edits) said:

14 July 2010
How about this for timeliness www.irs.gov/pub/irs-wd/10-0129.pdf

DaveFogel (talk|edits) said:

14 July 2010
TTMM, your link is Info Letter 2010-0129, which only addresses whether a therapy dog qualifies for the medical deduction. It appears that the original question was whether the dog could be written off as a business expense with respect to the therapist's business, and this is a different question.

The OP posted the same question on another message board, and has apparently abandoned her post on this board. On the other board, she provided the following additional information:

"The client will be taking the dog home. She plans to use the dog for therapy session with clients at least 3 days a week. the client will be charging for the sessions."

I posted the following reply on that other message board:

It sounds like the dog will be used in the client's therapy business, so business deductions for maintenance of the dog would seem to be allowable. But you're going to have to come up with some sort of an allocation between business and personal use. You might allocate based on the number of days that the dog is used in the client's therapy business divided by the number of days of the week.

It also sounds like depreciation would be allowable for the business-portion of the cost of the dog. MACRS 5-year property includes personal property used in a business that provides professional services for which a specific recovery period is not otherwise provided (Rev. Procs. 87-56, 77-10).

Death&Taxes (talk|edits) said:

14 July 2010
"The dog would also be kept at their home when not working" This leads me to believe that the therapist is keeping the dog, not the patient. TTMM's reference would give hope if the patient kept the dog.

Tax Writer (talk|edits) said:

15 July 2010
Why would a portion of the dog's expenses be allocated to personal use? I don't know much about police dogs and bomb sniffing dogs, but it was always my belief that the cost and care of these amimals is deductible, since they are treated like "tools" of the profession.

I remember reading a case a few months back in the EA Journal (I think) where the tax court allowed for a full deduction of an outdoor kennel for a police dog. The IRS tried to disallow it but the court allowed the deduction.

I don't see any real difference in these animals, except that one is used in public safety and the other in medical rehabilitation.

Tax Writer (talk|edits) said:

15 July 2010
Here's the tax case with the dog kennel/polic officer; It's worth a read. T.C. Summary Opinion 2009-109 [1]

DaveFogel (talk|edits) said:

15 July 2010
The court case you cite (Le v. Commissioner, T.C. Summary Opinion 2009-109) never discussed the business/personal aspect. The only issue was whether the police officer was entitled to deduct as a business expense the cost of constructing an outdoor kennel for his police dog. As the opinion points out, the police department required him to incur this expense before it would allow him to keep the dog at his home. According to the opinion, the IRS's only argument was that the the cost of the kennel was a capital expenditure.

The business/personal issue in THIS discussion is relevant because, as D&T points out, the dog would be kept at the taxpayer's home when not working, i.e., the taxpayer would be taking the dog home with her every night.

Death&Taxes (talk|edits) said:

15 July 2010
Yet I wonder if the Service sometimes goes further in allowing deductions for those in the mental health profession. The IRS did not acquiesce to Harry Voigt (74 TC 82) but later in Reg 1.162-5(b)(3), Example 4, more or less agreed. What I am trying to say is that in this area, the Service seems to ignore personal issues when a decent medical reason is there.

CrowJD (talk|edits) said:

15 July 2010
If the lady wanted to write off 100% of the expenses, then she needs some evidence that she can barely tolerate the dog. Allergies, incompaitiblity etc. Affidavits from neighbors (or a doctor or vet) could do this.

If they don't get along, then there is nothing personal about it.

However, if she personally likes the dog and they get along, then she will have to apportion these expenses.

Also, it would help if the dog was a revenue producer as this shows that it's a legitimate expense. So keep a subledger on the dog (cover it with plastic in case he drools on it).

I am actually in favor of dog therapy, I don't see how it can be worse than the human therapists who've been trying to help people now for over 100 years, and have gotten nowhere.

The only problem you are going to run into is if the IRS claims that this could be more cheaply outsourced to a Chinese dog that the patient interfaces with over the internet. In other words, the claim that a real dog is not necessary and a virtual dog will do just as well. So try to get some studies that show a real dog is better.

In conclusion, I would say that the lady is definitely barking up the right tree, but she can only take off 100% of the expenses if she has a 100% business relationship with the dog (and no cheating). And this would probably hurt the dog's feelings since the dog is ignorant of the tax code.

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