I did a lot of research on this, and learned a lot. Just search the net by "swimming pool tax credit" and you can also verify with your CPA like I did.

I also saw several real life examples of allowed and rejected deductions. Here is what I found - (this is mainly off the top of my head - research your own situation first, and chat with your tax guy!!!!)

1) If medically recommended, and backed up with appropriate doccumentation. (a perscription note will not do - everyone knows a doctor with a perscription pad. Be ready to provide medical records, disability analysis, hospital bills, etc. IRS may also require a third party MD opinion at their own expense) Mine was my wife with a stroke at age 37(Thanks Othro-Evera ).

2) you can only deduct the proportionate % used for medical rehab. Thus with me and by three kids also swimming for entertainment, the allowed % would be adjusted to basically 1/5.

3) the base deduction would be calculated on the minimum acceptiable pool needed. Thus for swimming laps, the IRS has a history of approving a simple lap pool say 10'x20' rectangle, plain vanilla ammenities.....and rejecting/ questioning the extra cost of optional features - water features, landscaping, rock features, patio areas, etc.

Basically immagine a nice pool you would like to see - vs one you would immagine seeing in a hopital rehab unit. This deductible pool is a medical device to be used for medical purposes, right?

Sooooo if you spend $30K...50K+....etc on a pool, the IRS may say a $10K pool would have worked, then you must reduce the deduction by the % it raises the value of the property (acording to the IRS/ local tax office - not according to reality), and also, as in my case, Wife would get medical use, and the rest of us recreation, so that is 1/5 and at the end of the day, the real credit is low.

4) the ammount you deduct would still need to be over your medical deduction level - I cant remember what it is, but you remember if you are making say $100K, you need at least 7,000 or so in medical bills before itimising has any impact. With my company healthcare, I have not had enough in medical bills/ prescriptions to itimise medical for 2 years now.


5) lastly......Almost an automatically GUARANTEED IRS AUDIT.

My conclusion? (My situation only)

forget the medical deduction, take a bit larger home improvement loan than I really need to, squirrel away the extra cash, and take the home improvement/ second mortgage interest tax deduction......

PS - the brief nominal consultation fee from my tax guy on this topic is deductible too.