Wall Street Journal, Unleashing Deductions for Your Pets, by Laura Saunders:
A self-described “cat lady” named Jan Van Dusen from Oakland, Calif., in June won a Tax Court decision against the IRS that broadened the scope for deducting animals on tax returns. Ms. Van Dusen had taken a charitable deduction for unreimbursed expenses for the care of feral cats for a nonprofit group. The IRS rejected the deduction, and the Tax Court sided with Ms. Van Dusen. The IRS has about three more months to appeal, and a spokesman declined to say whether it would. …
The Van Dusen case has resounded in tax—and pet—circles for most of the summer, and got Tax Report to thinking: What are some other ways people can deduct their pets?…
• Moving expenses … may include the cost of moving a pet. See IRS Pub. 521 at irs.gov.
• Estate expenses … The cost of maintaining a pet while an estate is being settled may be deductible if the animal has monetary value, such as a purebred dog. The expenses also may qualify if the animal provides security for property.
• Business expenses. The costs of acquiring and maintaining animals used in a business—say a guard dog or a cat that keeps rats in check—may be deductible as long as the company can show they are “ordinary and necessary” costs of doing business. …
• Service animals. The cost of acquiring or caring for a service animal such as a guide dog or hearing cat is eligible for a medical deduction.
