Quote from @Michael Plaks:
Quote from @Asia Whited:
Has anyone had success deducting fees from a REI membership that includes coaching/courses/workshops/etc without an entity in place?
What do you mean by "success"? People put all kinds of things on their tax returns, often completely against the rules, and it usually flies under the IRS radar. The audit rates are extremely low, albeit expected to sharply rise soon. Is this a success if you claimed it, and the IRS never challenged you? If yes, then a lot of people can boast these "successes." I expect that some of them will do so, on this very thread. I even know who. :)
As far as the rules, it's NOT about an entity. It is about having an
operational business. For landlords, it means having at least one rental property, and it should be ready and available for rent. In other words, to claim yourself as a restaurant operator, you need to have an actual restaurant and be ready to serve customers. Merely watching Iron Chef on TV is not enough.
The key questions are when did your property become ready and available for leasing, when did you purchase the membership and what exactly was included. Depending on the answers, various options exist. Some options are more conservative, and other options (if available) can be aggressive. It's case by case, like most of the complex tax issues.
Fair point Michael. My intention is not to cheat or pull something over, but rather to deduct cost of something intended to increase my knowledge for investing/business purposes which I deem absolutely relevant. I have had 1-2 doors rented for 10 years which I self-manage, and want to scale which was the reason for the purchase this past Nov 2021. Problem is I've had trouble finding a CPA with enough REI knowledge that I can talk it through with. Understandable as the 1st quarter is a busy time of year, but still frustrating ;) If you have 15 minutes to spare I'd love to get your expert opinion for the situation. I'm sure there are things I have missed over the years doing my own taxes, but I follow the rules that I understand even when I think they suck, haha. Like why the heck can't I deduct and HVAC annually (the amount I pay each year for financing) rather than depreciating it. Feels like you should be able to choose which way to go. Meanwhile larger commercial properties can write it off the year of purchase. Point is I try to do the right thing and feel like this is justified, but want to do it the right way :) Thanks for replying
