In 2020, a doctor diagnosed Paul with severe bronchitis. Paul had been a heavy smoker for many years. Paul's doctor told him to quit smoking and to develop an exercise regime to regain his breathing capacity.

After talking to his doctor, Paul stopped smoking. He also tried jogging and riding an exercise bike. But these types of exercise placed too much strain on his body. Therefore, Paul tried swimming. He found that swimming placed far less strain on his body than the other activities, yet it provided ample opportunity to exercise. He started swimming on a regular basis.

Paul could not arrange a swimming program at a pool in his community because of his work schedule: he worked long hours as an executive of a big manufacturing company. Paul discovered that the pools in his community did not open early enough, or stay open long enough, to allow him to swim on a regular basis.

Therefore, Paul and his wife decided to install their own pool in their residence. They built the pool at a cost of $40,000. The construction was completed in 2020. The pool room had an area of 2,200 square feet. The remainder of the house had an area of 4,000 square feet.

The pool was surrounded by a wooden deck and had some carpet. The pool had no specialized medical equipment.

In 2021, Paul swam in the pool at least twice daily. He improved his health by persistent exercise in the swimming pool. When he traveled on business and was unable to swim daily the shortness of breath and bronchitis returned after 4 or 5 days.

Paul alleges that his wife used the pool occasionally in 2021 as prescribed by her doctor to relieve arthritis pain. He also stated that his sons occasionally swam in the pool, and he and his wife never entertained in the pool room.

Paul and his wife paid the following amounts for the pool in 2021:

ITEM	AMOUNT
Heating Oil	$3,000
Chemicals	$500
Insurance & Electricity (for the entire residence)	$10,000
Lumber & Carpentry (replaced after mildew removal that grew since 2020)	$15,000
Shades (newly installed)	$1,800

 

Paul's and his wife's Adjusted Gross Income in 2021 is $150,000

You are Paul's tax advisor. Paul asked you whether he can report his expenses related to a swimming pool in his house in 2021? If so, how much can he deduct in 2021? Whether he has to carry forward any expense to the following year?

Your professional advice to Paul should include your arguments and explanation regarding tax treatment of the expenses and calculations of the total tax deduction.