You asked whether a piano, owned by SSI claimant Alicia W~, should be considered a
countable resource for SSI purposes, or whether it can be excluded as a resource required
because of her physical condition. We conclude that, although there is no caselaw
or other legal authority interpreting the applicable regulation, 20 C.F.R. 416.1216(c),
the Agency may consider the piano as an excludable resource, under 20 C.F.R. 416.1216(c),
provided Ms. W~ can show that playing the piano is required as treatment or therapy
for her physical condition. If the Agency finds that the piano is not so required,
further development and consideration may be warranted to determine the actual current
market value of the piano.
Alicia W~ owns a baby grand piano that the Wausau Field Office reported is worth $7000.
It is not clear how the valuation of $7000 was reached. For purposes of this memorandum,
we assume that $7000 is likely the amount Ms. W~ paid for the piano. Ruth J~, a benefit
specialist with the Aging and Disability Resource Center of Marathon County, has advised
SSA that Ms. W~ tried to sell her piano by advertising it in a local newspaper and
with the Wausau Conservatory of Music and by contacting several local churches. Two
individuals expressed interest, but Ms. W~ received no offers to buy the piano. We
do not know what price Ms. W~ asked or whether anyone would be willing to purchase
the piano for less than her asking price. Ms. J~ stated, in April 2002, that a local
music store sold only one comparable piano in the preceding year. The price that the
music store charged was not reported. Although Ms. J~ indicated that she was providing
the field office with a statement from the music store, no such statement was included
in the materials forwarded to us. Ms. J~ also reported that Ms. W~ uses the piano
daily and that she is the only member of her household.
Ms. W~ has a congestive heart condition and hypertension. On December 12, 2001, her
physician, Arthur W~, M.D., wrote a letter stating that playing piano provided Ms.
W~ with positive health benefits in terms of stress relief, which resulted in positive
benefits for her hypertension. Dr. W~ further stated that being forced to sell her
piano in order to receive SSI "would have a deleterious effect on her overall health."
The Social Security Act (the Act) provides that certain resources are excludable resources
for SSI purposes. 42 U.S.C. 1382b. Among the resources that may be excluded are household
goods and personal effects, but only to the extent that their total value does not
exceed the $2000 limit set by the Commissioner. 42 U.S.C. 1382b(2)(A); 20 C.F.R. 416.1216(b).
The regulations define "personal effects" to include musical instruments. Thus, a
portion of the value of Ms. W~'s piano could be excluded as a personal effect, provided
the total value of her other personal effects and household goods is less than $2000.
However, it appears that Ms. W~'s piano may be worth considerably more than that.
We must determine, therefore, whether her piano may be excludable for some other reason,
or whether the value of her piano can be considered less than previously assumed.
Exclusion for Items Required for Person's Physical
The exclusion for household goods and personal effects that are required because of
a person's physical condition does not appear in the Act. See 42 U.S.C. 1382b. The exclusion became a part of SSI regulations effective October
20, 1975. 40 Fed. Reg. 48911, 48916 (October 20, 1975). Neither the preamble to the
final regulation published on that date nor the preamble to the proposed regulation
states the rationale for the exclusion or gives any further clarification as to its
application. See 39 Fed. Reg. 2487 (January 22, 1974); 40 Fed. Reg. at 48911. Thus, we cannot ascertain
from those publications whether the Agency intended for the exclusion to apply to
items such as a piano that provide "positive health benefits" in terms of an individual's
physical condition. The POMS, likewise, provides no guidance in this situation. See POMS SI 01130.430. We were unable to find any caselaw interpreting the regulatory provision or any
OGC precedential opinion on the subject. Similarly, we found no caselaw regarding
other needs-based federal entitlement programs that might be helpful in interpreting
20 C.F.R. 416.1216(c).
The Internal Revenue Code (IRC), however, includes a personal income tax deduction
for medical care expenses. 26 U.S.C. 213(a). The definition of "medical care" includes
amounts paid "for the diagnosis, cure, mitigation, treatment, or prevention of disease,
or for the purpose of affecting any structure or function of the body. . .." 26 U.S.C.
213(d)(1)(A). The Internal Revenue Service (IRS) addressed the issue of whether the
cost of a piano could be deducted under the IRC medical care provision in two private
letter opinions. In the first, parents bought a piano so that their child, who had
polio, could strengthen her finger muscles and improve her posture. Priv. Ltr. Rul.
59-03205410A (March 20, 1959), 1959 WL 59702. The IRS determined that, if the use
of the piano was prescribed by a physician to mitigate the effects of the child's
illness, and if the child was the only one to use the piano, a portion of the cost
could be deducted as a medical care expense. Id. The portion of the piano's cost that could be deducted was "the minimum cost of a
piano of a quality sufficient for the therapeutic purposes" subject to the ceiling
of 7.5% of adjusted gross income, as provided in 26 U.S.C. 213(a). Priv. Ltr. Rul.
59-03205410A. Another private letter ruling states that, after suffering a nervous
breakdown, a taxpayer's daughter "was induced by her doctors to resume piano lessons,
in view of her particular aptitude in this area, as it was hoped that this would be
good therapeutic treatment and would create a motivation toward recovery." Priv. Ltr.
Rul. 63-02264710A (February 26, 1963), 1963 WL 14192. The taxpayer could not find
a suitable used piano, so he bought a new piano for $800. The IRS held that the taxpayer
could take a medical care deduction for "an amount which does not exceed the minimum
cost of a piano of a quality sufficient to effect the prescribed therapy," subject
to the limitations in 26 U.S.C. 213. Priv. Ltr. Rul. 63-02264710A (February 26, 1963),
1963 WL 14192. To the extent, however, that the expenditure was "elaborate," i.e.,
beyond the need for the prescribed medical therapy, it was not deductible because
it was not directly related to medical care. Id.
The IRC provision relied upon in these two private letter rulings is not identical
to the resource exclusion provision in the Social Security Regulations. The IRC section
would apply to expenditures for treatment of a mental condition as well as a physical
condition, but the Social Security regulation would allow exclusion of an item only
if it is required because of the SSI claimant's physical condition. Compare 26 U.S.C.
213(d)(1)(A), 20 C.F.R. 416.1216(c). While the Social Security regulation allows for
exclusion of a resource "required because of a person's physical condition," 20 C.F.R. 416.1216(c) (emphasis added),
the IRC provision, 26 U.S.C. 213(d)(1), allows a tax deduction for "amounts
paid" for treatment (emphasis added). Although the IRC section does not address whether
an expenditure is medically required, the private letter rulings provide some support
for the conclusion that, in some cases, piano playing may be prescribed as part of
an individual's medical treatment.
There is nothing in the Social Security Act or Social Security Regulations to direct
a conclusion on this issue. We think it reasonable, however, to conclude, based on
the private letter rulings, that there are situations in which a doctor may reasonably
require a patient to play a piano as a necessary part of treatment or therapy for
the patient's physical condition. Unlike the medical care deduction provision in the
IRC, the SSI exclusion for items required for a person's physical condition does not
place any limitation on the value of items which can be excluded, even though some
of the items listed, such as an engagement ring or a dialysis machine, could have
considerable monetary value. 20 C.F.R. 416.1216(c); see
also POMS SI 01130.430 ("Items Excluded Regardless
of Value") (emphasis added).
The letter from Ms. W~'s physician states that it is important that she enjoy the
benefits of her piano because it relieves her stress and, consequently, has a positive
effect on her hypertension. The doctor further states that selling the piano to receive
SSI benefits would be "deleterious" to her health. In the absence of evidence casting
doubt on the doctor's credibility, we think this statement may be sufficient for a
fact-finder to conclude that the piano is required for Ms. W~'s physical condition.
You may want to obtain clarification from the doctor, however, that he considers playing
the piano a required part of Ms. W~'s treatment or therapy for her hypertension or
her congestive heart condition. You may also want to verify that the "deleterious"
effect of selling the piano refers to her inability to receive the therapeutic benefit
of playing the piano, rather than to other factors, such as a contemplated elevation
of her blood pressure because selling the piano would upset her.
If you find that playing a piano is required for Ms. W~'s physical condition and she
is the only person who will use the piano, the entire value of the piano should be
considered an excludable resource. If, however, you find that playing piano is not
required for Ms. W~'s physical condition, it will be necessary to determine the piano's
Determining the Current Market Value
If you determine that the piano is not an excludable resource under 20 C.F.R. 416.1216(c),
the current market value of the piano will be subject to the $2000 maximum exclusion
for household goods and personal effects. 20 C.F.R. 416.1216(a) - 20 C.F.R. 416.1216(b).
Contrary to Ms. J~'s contention, the fact that Ms. W~ was unable to sell her piano
does not necessarily mean that the value of the piano is zero. The piano likely has
some value, even if it is not the $7000 purchase price. It is possible that the value
of the piano is zero, however, if, for example, a buyer's expense to move the piano
from Ms.W~'s home to a new location exceeds the price that a buyer would ordinarily
pay for the piano.
The information provided to us did not indicate what price Ms. W~ was asking for the
piano when she advertised it. It may be that she was simply asking a higher price
than the current market value and, therefore, did not get an offer. We suggest further
development to ascertain the current market value of the piano. For example, did Ms.
W~ get any offers to buy the piano and, if so, what amount was offered? Ms. J~ indicated
that the local music store sold one comparable piano over the past year. What was
the sale price? Are there other music stores in the area that carry comparable pianos?
If so, what price do they charge? Has Ms. W~'s piano been appraised? How much would
a pawn shop pay for the piano, given that it could be difficult to sell quickly?
We note that POMS SI 01150.200 contains a provision that, under certain circumstances, allows for conditional SSI
a limited period while an individual attempts to sell a non-liquid resource. The individual must agree
to sell the resource at the current market value within a specified period and use
the proceeds to refund the overpayment of conditional benefits. POMS SI 01150.200B.1. The period of conditional benefits where personal property is concerned would
generally end after three months, except that there could be one three-month extension
granted for good cause. SI 01150.201A. The individual must make reasonable efforts to sell the resource, taking all necessary
steps to sell the resource through the local media. SI 01150.201B.1. The information provided to us does not indicate whether Ms. W~ was eligible for,
or received, conditional benefits under these POMS provisions.
We also note that, even if Ms. W~ purchased the piano for $7000, and if the Agency
determines that the current market value of her piano is less than $7000, it does
not necessarily mean that her purchase was a transfer for less than fair market value.
See POMS SI 01150.005A. (transfers of resources for less than fair market value after December 14, 1999 may
result in a period of SSI ineligibility). Nor does the fact that Ms. W~ may not be
able to sell her piano for the same price she paid mean that she paid more than the
fair market value. Fair market value is the current market value of a resource at
the time the resource is transferred, i.e., the going price for which it could reasonably
be expected to sell at the time, on the open market in the geographic area involved.
POMS SI 01150.005. If Ms. W~ bought her piano on the open market, e.g., from a merchant, the $7000
purchase price is assumed to be the fair market value at the time of the transfer.
POMS SI 01140.005C.4.a. It may be that the value of the piano has depreciated since its purchase, or simply
that the going price for a comparable piano was $7000 at the time of the purchase
but is less now due to economic conditions. A prospective buyer might be willing to
pay more for a piano bought from a merchant whose reputation is known than he would
pay in a private sale by a stranger. A merchant might also be in a position to charge
more because he could offer a factory guarantee or a store guarantee that a private
seller like Ms. W~ cannot offer. Finally, a merchant might be in a position to wait
until a buyer came along who was willing to pay a higher price. Thus, the current
market value of the piano, in Ms. W~'s hands, may be less than the amount she paid
for the piano, even though the original purchase was not a transfer for less than
fair market value.
In summary, we conclude that, if the Agency fact-finder concludes that Ms. W~ has
shown that playing piano is required as part of her treatment or therapy for her physical
condition, the piano's entire value may be excluded under 20 C.F.R. 416.1216(c). If
the fact-finder concludes that playing piano is not required for Ms. W~'s physical
condition, the current market value of the piano should be considered a household
good or personal effect subject to the $2000 maximum exclusion for all household goods
and personal effects. However, the Agency may want to give further consideration to
the current market value of the piano in Ms. W~'s hands.
Thomas W. C~
Regional Chief Counsel
Nancy L. B~
Assistant Regional Counsel