Taxing Lessons Case Summaries

Case — Medical Expense Deduction for In Vitro Fertilization

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TL Case Summ


Are in vitro fertilization expenses that are incurred voluntarily a deductible medical expense?


Taxpayer Says: Expenses paid for sperm and egg donation and surrogate mothers are deductible.

Internal Revenue Service Says: The expenses were not incurred for medical reasons and cannot be deducted.


From Internal Revenue Code Section 213(a): Allows for the deduction of paid expenses “not compensated for by insurance or otherwise, for medical care of the taxpayer, his spouse, or a dependent * * * to the extent that such expenses exceed 7.5 percent of adjusted gross income.”

From Internal Revenue Code Section 213(d)(1)(A): 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”.

From Federal Tax Regulation 1.213-1(e)(1)(ii): Deductions for expenditures for medical care allowable under section 213 will be confined strictly to expenses incurred primarily for the prevention or alleviation of a physical or mental defect or illness.


To be deductible, medical costs you pay during a tax year generally have to be an essential element of the prevention, relief from or treatment of a medical condition, as well as expenses you wouldn’t have otherwise incurred for nonmedical reasons.

You don’t necessarily have to be sick for an expense to qualify. For instance, annual physical examinations, full body diagnostic scans and pregnancy tests are deductible medical care expenses. However, expenses of a personal nature, such as elective cosmetic surgery, do not qualify.

In this case, the taxpayer, though not infertile, incurred expenses related to in vitro fertilization. The expenses included sperm and egg donation, as well as the costs for two unrelated surrogates to carry the babies to term. As support for his belief that the expenses are deductible, the taxpayer points to a Private Letter Ruling (2003-18-017 (Jan. 9, 2003)) which stated “the expenses for egg donor, medical and legal costs are deductible medical expenses”. [Note: Private Letter Rulings are issued by the IRS to a specific taxpayer, based on a specific set of facts. While they indicate the position of the IRS on the matter in question, they are not law.]

The IRS says the expenses are nondeductible because choosing in vitro fertilization was a personal and nonmedical decision. In addition, unlike the taxpayer in the cited Private Letter Ruling, the taxpayer in this case had no physical or mental defect or illness which prohibited him from procreating naturally.


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HL Carpenter, an experienced investor and a CPA, specializes in reader friendly articles on taxes and investing for individuals and small businesses, and publishes two newsletters: Taxing Lessons and Top Drawer Ink. Visit and

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Right answer!
For the IRS. The expenses are not deductible because the taxpayer has no medical condition or defect to which those expenses relate and because they did not affect a structure or function of his body. Expenses incurred in the absence of the requisite underlying medical condition or defect and that do not affect a structure or function of the taxpayer’s body are nondeductible personal expenses within the meaning of section 262.