How to write off real estate education course purchased on taxes?

[Luke Siecinski]

Hello!

In 2022 I purchased a real estate course and am wondering if it's possible to write it off on my tax return. I have just one investment property that I rented out Feb-Dec of 2022. Other than that I am a full time W2 employee. If it is possible to write off, which tax form would it be on? If you need any more info or context from me let me know!

Thank you,

Luke Siecinski

[Ashish Acharya]

Quote from @Luke Siecinski:

Hello!

In 2022 I purchased a real estate course and am wondering if it's possible to write it off on my tax return. I have just one investment property that I rented out Feb-Dec of 2022. Other than that I am a full time W2 employee. If it is possible to write off, which tax form would it be on? If you need any more info or context from me let me know!

Thank you,

Luke Siecinski

 May be this is helpful to you:

This is the case that is related to you.

Code Sec(s):	162; 195
Docket:	Dkt No. 30077-07.
Date Issued:	04/30/2009.
Judge:	Opinion by Gustafson, J.
Tax Year(s):	Year 2004.
Disposition:	Decision for Commissioner.

Started investigating property: Feb

Put first contract (canceled): May

Bought first property: December 30th

Court decided that his 21k education expense was not deductible as business expenses but would be considered, at best, the start up cost. Start up cost are also deductible but are amortized over 15 years with the limit of 5k.

Start up cost have strict rules too. And your case might not be exactly as this case.

Here is the summary if you are interested.

In this case, the main question is when did the investor completed his start-up phase and became actively engaged in his business.

Whether a taxpayer is engaged in a trade or business is determined using a facts and circumstances test under which courts have focused on the following three factors that indicate the existence of a trade or business:

(1) whether the taxpayer undertook the activity intending to earn a profit;

(2) whether the taxpayer is regularly and actively involved in the activity; and (3) whether the taxpayer's activity has actually commenced.

“On the basis investor testimony, we may assume that he undertook this activity to make a profit and that he regularly and actively engaged in it. However, it is the third factor—whether investor business had actually commenced—that is determinative here.”

“In investor’s business outline, dated May 10, 2004, he indicated that he was starting Value Property Investments “for the purpose of buying, remodeling and renting property.” Therefore, until investor began to buy, remodel, or rent—i.e., to perform the activities for which Value Property Investments was organized—he was not carrying on a trade or business as contemplated by section 162(Business deduction).

Nonetheless, in order to resolve the matter before us, we do not need to decide whether Mr. Woody's business started at the time he purchased the 1st property or at the time he held it out for rent, because, in any event, the expenses in question here all occurred before the purchase date, i.e., before December 30

If the earliest possible date investor was actively carrying on a trade or business was December 30, 2004, then any expenses incurred in that year but incurred “before the day on which the active trade or business” began, all the expenses incurred from January 1 through December 29, 2004--would be, by definition, start-up expenses whose deductibility, and possible amortization, is expressly dealt with by section 195(Start up amortization).