All Forum Posts by: Kris Barney

Hi BP Members. I'm new to BP (but really enjoying it!), and was hoping to see if anyone had any experience with this scenario, and if so, had any suggestions: I'm considering co-owning/purchasing a small vacation home with a couple of friends, which we will each utilize a little bit, and rent out otherwise. I'm really intrigued by tax planning for this property -- specifically if/how I could plan my visits to this property and write-off those trip costs.   

1) I'd be a partial owner (and passive, largely); curious if that would impair my ability to write off trip costs in any way?

2) I'm aware that I need to pre-plan my trip with business activities ahead of time, and I need the majority of my trip to be business related. If I'm a more passive RE investor (at least as of now I would be; I'm catching the RE investing bug and will likely become more active in the future), could I count things like "evaluating the neighborhood" as a business activity (given that is a component of RE investing)?  What about inspecting the property?  I'm more than happy to dedicate the time necessary to meet the required 50% rule per the IRS, but really curious what options people have used to meet this criteria if they are passive, partial-owners?

3) Is there a limit on the number of times per year I could make such a trip to the property to do this?

4) If I partially owned multiple properties in the same area, would it change anything?

Thanks in advance for all the help/thoughts/advice!

Some friends and I are considering buying a VR together, which we plan to use a little and rent out the rest of the time. I believe if I owned the property outright, I could deduct 1-2 visits per year to the property to "check up on it". (1) Would I still be able to deduct these trip expenses as a partial owner? (2) if yes, is there a certain percent of the property I would need to own to be able to deduct the trip cost? (3) is there any type of co-ownership entity (LLC, S-corp, GP/LP) that would provide more preferential treatment for this? (4) if #1 is yes, what expenses of a family of 4 trip to the property for 7 days could I deduct? All 4 plane tickets, or just 1? Meals for all 4 ppl, or just me? Rental car? Lodging cost (assume me/partners agree we have to at least partially pay for our use when we use the co-owned property)?