WASHINGTON Sex changes are tax deductible, US court rules

Costs incurred in sex-change operations and procedures are tax-deductible, the US Tax Court has ruled.

The court ruled that hormone therapies and sex reassignment surgeries were necessary to treat gender identity disorder in the case of a Boston man who became a woman named Rhiannon O'Donnabhain after 20 years of marriage that produced three children.

''The court is persuaded that petitioner's sex reassignment surgery was medically necessary,'' Judge Joseph Gale wrote in a decision for the majority.

The decision is the first to rule that sex-change operations qualify as medical care and overturns a 2005 Internal Revenue Service policy denying medical expense deductions in such operations on the grounds they are ''cosmetic''.

The case involves a $US5679 ($6450) tax bill assessed by the IRS, which denied medical deductions Ms O'Donnabhain claimed after she underwent sex reassignment-surgery in 2000.

Ms O'Donnabhain, a civil engineer, was diagnosed with gender identity disorder in 1997.

She sued the IRS after it denied her a deduction of $US25,000 in out-of-pocket medical costs associated with the surgeries and other care such as hormone treatments and counselling, according to Gay & Lesbian Advocates & Defenders, which represented her in court.

Karen Loewy, a lawyer with Gay & Lesbian Advocates & Defenders, said the court's decision ''recognises that expenses related to medical care for transgender people should be treated no differently than expenses related to an appendectomy or chemotherapy''.