Can you get a tax deduction for paying a prostitute?
In 2004 and 2005, a tax lawyer named deducted more than $100,000 he had paid to prostitutes for services rendered. He categorized this as a medical expense per § 213 of the tax code. He described it as “sex therapy”
Now, § 213(a) does allow a deduction for medical/dental expenses. But the Treasury Regulations say you can’t get a deduction for illegal medical treatments. Since prostitution was illegal in the taxpayer’s state of New York, the Tax Court disallowed the deduction
The taxpayer also tried to deduct several thousand dollars for pornographic materials, but the Tax Court said that didn’t count as a medical expense either. The materials weren’t prescribed by a doctor, and were thus a personal expense. And the tax code doesn’t give many deductions for personal expenses
So, if you want to deduct the cost of sex therapy:
• It needs to be legal in your state
• It needs to be prescribed by a doctor
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