Fertility and taxes are seemingly unrelated topics with surprising intersections. Consider this example. Taxpayers can exclude up to $250,000 (if single) or $500,000 (if married and filing jointly) of gain on the sale of a principal residence, if certain requirements are met. A homeowner who moves too early or too often gets no benefit … unless the move is motivated by “a change in place of employment, health, or to the extent provided in regulations, unforeseen circumstances.” One unforeseen circumstance is the birth of twins, according to the Treasury Regulations.
According to the Centers for Disease Control and Prevention (here), approximately 4.6% of total U.S. births are the result of ovulation stimulation medication alone (without in vitro fertilization). 22.8% of all multiple births in the U.S. in 2005 resulted from ovulation stimulation medication (used alone, without IVF). Although multiple births are “unforeseen” according to the IRS, the CDC stats suggest otherwise. Even so, I’m not sure I’d want the IRS to start doing a facts-and-circumstances inquiry every time the parents of multiples try to avail themselves of the tax benefit under IRC Section 121.