Two Questions (Mileage Related)

[Nicholas P.]

1) Can anyone recommend an accountant in Des Moines area that they use and specialize in real estate?

2) Regarding mileage. Lets say I'm going to Ankeny for dinner, its about 30 miles round trip for me. If I look up a house that is near the restaurant to stop at along the way and then claim the mileage as a deduction (30 miles) is there any fault to that?   If no, what stops someone from doing that for EVERY trip they make? I could literally, by just taking a couple extra seconds deduct, every single bit of mileage on my car even though I'm using it for personal use at or along the way to the business destination.  Going to WalMart? Nope just looking at paint colors. Going to the zoo? Just checking out the surrounding neighborhood. Going to day job? Nope just taking a new side street each day to check out houses or see what neighborhood activity looks like on different days of the week.

-Do you have to split the mileage up personal and business? Or is there something I'm missing?

-I have a '13 Honda Civic that costs me just 32 cents per mile including maint/depr. yet the government gives 50+ cents per mile.  Thus, I'm netting 18+ cents per mile and free trips to groc store.

-One last sub question. Best free mileage tracking service with smartphone? Any recommendations?

[Linda Weygant]

Mileage can be a tricky thing.  What you're suggesting is possible, but you must already be "in business".  So if you're just starting out and trying to deduct this type of mileage, but you haven't actually done a deal yet, you may need to accumulate your mileage expense and then amortize it as part of a Business Start Up cost.

If you're already in business, this may work if you're actually in a buy mode and do end up buying something relatively soon.  If you put this method into action, but never actually buy anything, the IRS will likely question this at some point.

But if you're continually in a purchase mode, I see this as a fairly legitimate method.  I would make sure you keep a history of the houses you visit and why.  They should probably also actually be for sale unless you have a successful history as a wholesaler who is able to convince people to sell their houses when they aren't actually for sale.

In other words, this is not a strategy that will "just work" for anybody.  There are facts and circumstances that should be in place before implementing this.