LOOK for property while on vacation and Deduct the Cost
Last Minute Tax Tip - LOOKING for new property while on vacation
Be sure to deduct the cost of expenses incurred while looking for new property. Travel expenses in connection with the management of your investments are tax deductible if they are ordinary and necessary.
At least half of the time you spent away on travel must have been spent doing business, and the primary cause for travel must be business. Common business expenses that you can deduct while scouting for new investment properties are fees for travel, lodging, and services.
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Comments (2)
Hi Josh, thanks! All is well when it is ordinary and necessary! For example, flying with your spouse (your business partner) to Orlando to scout and purchase a rental condominium. Since this is a business trip, it wouldn't matter if you spent some time walking on the beach or even if you made a stop at Disney World, just as long as more than half the time you spent away on travel was spent doing business; and the primary cause for travel was business. Obviously you can't just write off your hotel and travel to Disney World just because you're thinking about buying Cinderella's Castle, so it's always good to consult with a professional first!
Niman S., over 15 years ago
Great tip, Niman. Those vacations that turn into real estate expeditions can have positive tax implications if you understand the tax code. Thanks for sharing!
Joshua Dorkin, over 15 years ago