Drones and Tax Write Off

9 Replies

Hello Everybody,

I am not sure if this is the correct forum.

However, does anybody know if a drone can be a tax write off? I purchased one so I don't have to climb a ladder and check the condition of the roof and I can take an aerial view and photos of my potential property.

Thanks for you help and advice.

Chris McFadden

@Account Closed first off, let me start by saying that this is NOT legal or professional advice.  It's just my opinion.  Now that that's taken care of, I don't see why it couldn't be written off as a business expense.  It would make an excellent tool for inspections as well as photos for marketing and probably other uses you can find as time goes along. 

James,

Thanks for the info. I am getting my tax stuff ready for my CPA, and I will eventually asked them. But that will not be until the new year. Thanks again for your advice.

Originally posted by @Account Closed :

James,

Thanks for the info. I am getting my tax stuff ready for my CPA, and I will eventually asked them. But that will not be until the new year. Thanks again for your advice.

 I'd take it. But my concern would be personal use. 

Hi, Chris. I am not an accountant but I like your idea of using a drone as an inspection tool in real estate. Probably the IRS will allow a partial deduction in taxes, due to the fact that you may use it for personal pleasure also.

I'm with Steven, take it, but be prepared to show it is not used for personal use. About the only way I see of dedicating 100% of its use is to buy another drone for personal use, take a picture of both. Put your logo and business name on the business drone. Buy the fuel and/or batteries through the business account. File/save the pictures taken, use a date time stamp on photos if you can, that shows your business use inline with jobs performed. Get a pic of the address and fly directly to the area to inspect and begin inspection. Don't have any pics filed between jobs that are personal. 

The more you can show it's only for business, the better your position. Much like a cell phone. 

My rule of thumb for deductions is; when the item is questionable and the amount will place me in another tax bracket, I'm conservative because if it were disallowed I would owe more in taxes and penalties. If it's not significant in the end, I take it as the effects would be minimal in the end. Auditors take the same approach, is it going to be worth the effort to continue an audit, is there fraud, violations of law.......the hunt has to be worth the benefits of the kill. :) 

Originally posted by @Bill Gulley :

I'm with Steven, take it, but be prepared to show it is not used for personal use. About the only way I see of dedicating 100% of its use is to buy another drone for personal use, take a picture of both. Put your logo and business name on the business drone. Buy the fuel and/or batteries through the business account. File/save the pictures taken, use a date time stamp on photos if you can, that shows your business use inline with jobs performed. Get a pic of the address and fly directly to the area to inspect and begin inspection. Don't have any pics filed between jobs that are personal. 

The more you can show it's only for business, the better your position. Much like a cell phone. 

My rule of thumb for deductions is; when the item is questionable and the amount will place me in another tax bracket, I'm conservative because if it were disallowed I would owe more in taxes and penalties. If it's not significant in the end, I take it as the effects would be minimal in the end. Auditors take the same approach, is it going to be worth the effort to continue an audit, is there fraud, violations of law.......the hunt has to be worth the benefits of the kill. :) 

 Bill that is a good strategy and well put to describe the situation.

As a side note, you will want to look into the FAA rules for commercial drone operations.  It is a constantly evolving regulatory landscape and I've seen a few in real estate get in a bit of trouble with the FAA.

I've never heard of anyone being fined by the FAA for using a drone commercially when flying below controlled airspace.  Laws have existed for many years to penalize that.  The FAA tries to intimidate with an "educational" letter. There have been instances of fines for flying recklessly and for flying in a NOTAM, TFR or no-fly zone. 

Yes, it is a rapidly evolving landscape and rules for commercial drone use are "supposed" to be announced in late March..... we'll have to see if that date changes. The regulations released within the past two weeks relate only to recreational use, not commercial use. The current "section 333" guidelines are not law and compliance is totally impossible unless you're taking photos of ranches or other large properties.

The most current (and accurate) information about commercial drone usage is at DroneLawJournal.com. I bet they'd like to know about anyone who has been been threatened with a fine by the FAA for flying commercially outside of controlled airspace. So far, the FAA has avoided court challenges for this. There is a lot of incorrect information floating around the Internet, by the NAR and various misinformed sources; this site tries to clear up the confusion.