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Posted by Tax Tip on June 4, 2008, 10:13 am
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Travel expenses in connection with the management of your investments
are normally tax deductible (they must be ordinary and necessary), and
that's why you can deduct the cost of expenses incurred while looking
for new property.
For example, you fly with your spouse (aka your business partner) to
Orlando to scout and purchase a rental condominium. Since this is a
business trip, you can deduct the cost of all business expenses, like
travel, lodging, and services.
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 half the time you
spent away on travel was spent doing business; and the primary cause
for travel was business.
Just be careful, of course. Obviously you can't just write off your
hotel and travel to Disney World just because you're thinking about
buying Cinderella's Castle.
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