Question & Answers

What surrogacy expenses can I deduct on my tax return? How about payments and expenses for egg donor?

0 Votes
Jul 6, 2010 by Academix
Category: Tax Planning

Kerry Freeman EA
0 Votes
Advisor: Kerry Freeman EA, IRS Tax Relief
Jul 7, 2010  
If the question is about personal deductions ( found on schedule A with AGI limits). Then the advise from Tax Advisors is 100% correct.

I take issue with Telesky with "No medical problem" since even a healthy natural births has deductable medical expenses (with AGI limits).

I did not see where Linard and Ron got the business idea from? If this is a business motive then the reasonable and customary expenses are deductable on the schedule C. The question of how many times, a DBA or Bank account does not determine a business motive. Saying that a Busines motive would be the factor to make such Schedule C deductions, If your motive is anything but business then no deduction is allowed.

Kerry Freeman, EA

Kurt E Giebel
0 Votes
Kurt E Giebel
Jul 7, 2010  
IRS code allows fertility enhancement expenses to be deducted. Specifically mentioned are medical expenses the cost of the following procedures to overcome an inability to have children.

* Procedures such as in vitro fertilization (including temporary storage of eggs or sperm).

*Surgery, including an operation to reverse prior surgery that prevented the person operated on from having children.

Based upon what the code says, there appears to be no limitation for expenses relating to medical procedures related to achieving pregancy. Source is based upon Pub. 502.
Linard Williams
0 Votes
Linard Williams
Jul 6, 2010  
First how many times have done this as a business?

Second do you have a business name (DBA) and bank account?

Third did you make enough money to warrant deduction?

1) All maturinty bill that the insurance did not reimburse you.

2) Milage to the hospital, doctor appointments.

3) Medicine and vitamins purchased.

4) Professional fees

Linard Williams

Direct: 661255-6434

Fax: 661 244-2807


Tax Advisors
2 Votes
Advisor: Tax Advisors, Tax Planning
Jul 6, 2010  
Section 213(a) of the Internal Revenue Code released on May 2, 2003 says:
“Expenses preparatory to the performance of a procedure that qualifies as medical care that are directly related to the procedure may also constitute medical care for purposes of § 213. For example, Rev. Rul. 68-452, 1968-2 C.B. 111, holds that surgical, hospital, and transportation expenses incurred by a donor in connection with donating a kidney to the taxpayer are deductible medical expenses of the taxpayer-recipient for the years in which the taxpayer pays them, subject to the limits of § 213. Similarly, expenses the taxpayer pays to obtain an egg donor, including the donor’s expenses, are directly related and preparatory to the taxpayer’s medical expenses and are deductible by the taxpayer in the year paid.

You have represented that you will pay the fee to the donor, the fee to the agency that procured the donor, the donor’s medical and psychological testing expenses, the insurance for post-procedure medical or psychological assistance to the donor, and the cost of the legal contract between you and the donor, in order to enable you to obtain a donated egg for implantation into your body. Because these costs are preparatory to the performance of your own medical procedure, the expenses are medical care for purposes of § 213.”

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Telesky Financial Services
1 Votes
It depends. If there is a medical problem such as infertility then the legal and medical costs for a surrogate would be deductible. If there is no medical problem, then none of the expenses would be deductible.
Ron Lowell
0 Votes
Ron Lowell
Jul 6, 2010  
All expenses of the surrogacy are reportable on your Schedule C. Your income or payments from the parents would also be reported on the Schedule C as the adopting parents would need to report the payments on a 1099. When totaling those expenses, don't forget the use of your vehicle or any other expense for doctor visits or visits to the adoptive parents.

Ron Lowell

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