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We explained to Denise that any travel expenditures straight related to business or real property could be taxes deductible. As they are going to their leases long, scoping out new ones, or attending conferences related to real property, pretty much all their travel-related expenditures could be accounted for come tax time.
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When we started to describe these rules to Denise, she was very adamant these deductions did not apply to her. She explained that they strategically picked their renting based on where their grandkids and kids lived. If they drove to LA or flew to Pennsylvania, they were visiting their properties and attending seminars and meetings, however they usually also took time to see their family. This is why Denise felt their expenses wouldn’t be deductible. Unfortunately, this is a misconception we listen to again and again. Just because you stay in to see friends or family on your way to visit a rental property, that doesn’t mean the travel cost is not deductible.
It is very possible to write off your travel costs, even if you take a day or a weekend to visit with family en route. After hearing Denise’s reasons for not sending us her travel expenses, we explained that as long as the primary reason behind their trip is business, they can deduct the associated travel expenses. Furthermore, even if the principal reason for a vacation was to go to the family, and she spent only a little bit of time on her behalf rental properties, some of her travel and out-of-pocket costs might still be reputable taxes write-offs.
Denise was shocked. She and Dan had been in real property for five years rather than realized just how many deductions these were passing up on. She assumed that because part of their travel time was spent with family, nothing of their expenditures could be deducted, when the truth is, most of it could because the principal reason for their travel was their leases.
They often journeyed if there was a problem with one of their properties, if they needed to meet someone, or they were searching for a new property. Generally, only after all of the ongoing work had been looked after would they head to see their grandkids. What Does This All Mean?
Contrary to popular belief, the IRS is much less horrible as one might think. A lot of loopholes are written into the tax code that taxpayers are invited to use. As possible to conclude from Dave and Denise’s story, the IRS does allow tax deductions even though business travel includes certain personal benefits.