what can i write off?

Question

I plan on going to arizona on vacation, but I have real estate their. so how can i make it a buisness trip and use that to write off my roundtrip?

Answer 1

If the primary purpose of the trip is to inspect your property, make repairs, meet with prospective tenants, etc. then you can deduct the cost of the trip. If part of the trip is for pleasure, you can only deduct the business portion of the trip. In order to deduct the cost of travel you must spend more time on the rental property business than the vacation. A couple of examples may help.

1. You travel to AZ and spend 1 day working on the property and 1 day meeting with prospective tenants. You spend 5 days on personal activities. You spend 1 day in travel each way. You may deduct 2 days worth of lodging and 1/2 of the meals for 2 days. You man not deduct ANY travel expense since the primary purpose of the trip was for personal activities.

2. You travel to AZ and spend 4 days working on the property and 1 day meeting with prospective tenants. You spend 2 days on personal activities. You spend 1 day in travel each way. You may deduct 5 days worth of lodging and 1/2 of the meals for 5 days. You may deduct 1/2 of the meals while traveling plus all of the travel costs since the primary purpose of the trip was for business.

Answer 2

You will need written documentation that the main purpose of the trip was to deal with the real estate. Of course, the real estate must be an incoming producing asset.

Spending a week there playing and visiting and just driving by the property won't be sufficient.

Also be aware, this could be one of those red flags that set off an IRS audit.