Tax Guru – Ker$tetter Letter

Q:

Subject: can i deduct myself?

 

I’ll assume you’ve already seen this link:

http://moneycentral.msn.com/content/Taxes/P108364.asp

I particularly like the concept of depreciating an ostrich during it’s reproductive period.  I have successfully produced two children.  Do you think I could depreciate myself over 82.5 years (or whatever the going rate is nowadays)?

Thanks for your wonderful website (taxguru.net).  It is the first thing I read every morning.

A:

I did see that article.  Depreciating breeding animals is really nothing unusual. I have prepared hundreds of returns doing just that, including horses, cattle, llamas, dogs, and even some kangaroos and wallabies for some clients here in Arkansas.

I realize that you were making a joke about depreciating yourself. However, never missing an opportunity to clarify mystical and arcane tax issues, I do want to comment. 

First is the reason for depreciating an animal or any other asset on tax returns.  This is only allowable for business assets which are being used to earn potentially taxable income. 

When we set up animals for depreciation, we need to establish the appropriate cost basis to use.  For animals that were purchased, we use the amounts paid.  For animals that were born on the client’s premises, there is no new out of pocket cost, so those animals can’t be depreciated. 

So, assuming you were in the business of professionally breeding humans, I’m afraid that your own body has a cost basis of zero.  You didn’t pay anything for it, as it was a gift to you from our creator.

To follow that chain of thought a little further, if a person were to pay for a body part that is to be used in a business enterprise, that cost could be depreciated on the person’s tax return.  I’m sure this is done for show biz celebrities for their cosmetic surgeries and other enhancements that help them earn more money.

Thanks for writing and giving me an interesting topic to discuss.

Kerry Kerstetter