Taxpayer asks:
Dear Taxgirl,
I heard from many sources that you can write off your expenses for any pets you foster.
Is this true?
Taxgirl says:
You may be in luck!
In 2011, the Tax Court upheld most expenses related to the care of feral cats fostered by a taxpayer. The Tax Court agreed with the taxpayer that the expenses for the care of the animals could be treated as out of pocket expenses incurred while performing services for a qualifying charitable organization.
In the case, the taxpayer, Jan Van Dusen, volunteered with an organization called Fix Our Ferals. As part of her services, Van Dusen trapped feral cats, had them spayed and neutered, and provided them with necessary medical care, including vaccinations. She also cared for the pets while they recuperated and released them back into the wild. In addition, Van Dusen provided long-term foster care to cats before usually placing them in one of two no-kill shelters, Berkeley East Bay Humane Society or East Bay Society for the Prevention of Cruelty to Animals.
Van Dusen deducted the expenses for the care of the animals arguing that it was a charitable expense. The Internal Revenue Service (IRS) initially denied the entire deduction, claiming that the expenses were personal in nature and not rendered on behalf of a qualifying charity.
The Tax Court allowed a portion of Van Dusen’s expenses related to the care of the cats as a charitable expense while denying a portion attributed to personal use. Expenses were only allowed to the extent that Van Dusen had substantiated them.
You can read the case, Jan Elizabeth Van Dusen v. Commissioner of Internal Revenue, here (downloads as a pdf).
The takeaway? The normal rules for charitable deductions likely apply here. If you foster or rescue animals, your out of pocket expenses (food, medicine, and veterinary bills) may be deductible for charitable purposes so long as you:
- Perform services on behalf of a qualifying charitable organization;
- Keep excellent records which clearly show that the expenses are for charitable and not personal expenses;
- Get a contemporaneous acknowledgment of your contribution from the qualifying charitable organization; and
- Remember that the value of your time is not deductible.
For more tips on making your charitable deduction count, click here.
Before you go: be sure to read my disclaimer. Remember, I’m a lawyer and we love disclaimers.
If you have a question, here’s how to Ask The Taxgirl.
