Can A Handgun Be Considered A Business Expense?
Investor · West Monroe, LA · Member since 2015 · 196 posts · 70 votes
Can A Handgun Be Considered A Business Expense?
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Logan AllecBusiness Member
Accountant · Los Angeles, CA · Member since 2014 · 1k+ posts · 980 votesI'd say no, a handgun would not be ordinary and necessary to your real estate business (assuming you have a real estate business). The discussion on page 6 of is interesting. I'm not saying this case is in any way applicable to your situation, but I am rather just providing it as information so you can see what a Tax Court judge thought about an argument similar to yours.
Excerpt (emphasis mine)
3. Claimed Depreciation of Guns and Deduction of Ammunition Expense
Petitioner, who was interested in collecting guns, purchased two pistols in 1972 for $194 and deducted the amount as a business expense. In 1973 he bought eight guns for $1,491. Four of these were on display in his apartment. He claimed that the other four were used for personal protection at his office and in his car, and therefore deducted their cost as a business expense. An unsolved murder had occurred in the Marina City complex in 1972. Petitioner sometimes goes to what he believes are unsafe job sites to settle insurance claims. Petitioner filed an application to become a deputy sheriff in Cook County in 1973 and he began a training program sometime during that year. He spent about $34 for ammunition in 1973.
In his notice of deficiency respondent disallowed all of the claimed deductions for the guns and ammunition.
There is no way this Court will sanction the deductibility of a private handgun collection under these circumstances. A handgun simply does not qualify as an ordinary and necessary business expense for an insurance agent, even a bold and brave Wyatt Earp type with a fast draw who is willing to risk injury or death in the service of his clients. We regard such expenses as extraordinary rather than "ordinary" to the usual and customary business of an insurance agent. Nor are they "necessary," i.e., appropriate and helpful, for the development or protection of his business. Indeed, petitioner's arguments for deductibility strike us as erroneous and just plain nonsense. Consequently, we hold that the amounts spent for the guns and ammunition are personal expenses which are nondeductible under section 262.
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29 Replies
- 8yLogan AllecBusiness MemberAccountant · Los Angeles, CA · Member since 2014 · 1k+ posts · 980 votes
I'd say no, a handgun would not be ordinary and necessary to your real estate business (assuming you have a real estate business). The discussion on page 6 of is interesting. I'm not saying this case is in any way applicable to your situation, but I am rather just providing it as information so you can see what a Tax Court judge thought about an argument similar to yours.
Excerpt (emphasis mine)
3. Claimed Depreciation of Guns and Deduction of Ammunition Expense
Petitioner, who was interested in collecting guns, purchased two pistols in 1972 for $194 and deducted the amount as a business expense. In 1973 he bought eight guns for $1,491. Four of these were on display in his apartment. He claimed that the other four were used for personal protection at his office and in his car, and therefore deducted their cost as a business expense. An unsolved murder had occurred in the Marina City complex in 1972. Petitioner sometimes goes to what he believes are unsafe job sites to settle insurance claims. Petitioner filed an application to become a deputy sheriff in Cook County in 1973 and he began a training program sometime during that year. He spent about $34 for ammunition in 1973.
In his notice of deficiency respondent disallowed all of the claimed deductions for the guns and ammunition.
There is no way this Court will sanction the deductibility of a private handgun collection under these circumstances. A handgun simply does not qualify as an ordinary and necessary business expense for an insurance agent, even a bold and brave Wyatt Earp type with a fast draw who is willing to risk injury or death in the service of his clients. We regard such expenses as extraordinary rather than "ordinary" to the usual and customary business of an insurance agent. Nor are they "necessary," i.e., appropriate and helpful, for the development or protection of his business. Indeed, petitioner's arguments for deductibility strike us as erroneous and just plain nonsense. Consequently, we hold that the amounts spent for the guns and ammunition are personal expenses which are nondeductible under section 262.
Clarita CPA Group516 Reviews - Member since 2016 · 13k+ posts · 12k+ votes8y
Whether it can or can not if you are buying a gun regardless submit the expense to your accountant and see what happens.
I generally file that type of expense under tools. My accountant does not require receipts and it is my risk in the eevent I am audited.
- Investor · West Monroe, LA · Member since 2015 · 196 posts · 70 votes8y
Originally posted by @Logan Allec:
I'd say no, a handgun would not be ordinary and necessary to your real estate business (assuming you have a real estate business). The discussion on page 6 of is interesting. I'm not saying this case is in any way applicable to your situation, but I am rather just providing it as information so you can see what a Tax Court judge thought about an argument similar to yours.
Excerpt (emphasis mine)
3. Claimed Depreciation of Guns and Deduction of Ammunition Expense
Petitioner, who was interested in collecting guns, purchased two pistols in 1972 for $194 and deducted the amount as a business expense. In 1973 he bought eight guns for $1,491. Four of these were on display in his apartment. He claimed that the other four were used for personal protection at his office and in his car, and therefore deducted their cost as a business expense. An unsolved murder had occurred in the Marina City complex in 1972. Petitioner sometimes goes to what he believes are unsafe job sites to settle insurance claims. Petitioner filed an application to become a deputy sheriff in Cook County in 1973 and he began a training program sometime during that year. He spent about $34 for ammunition in 1973.
In his notice of deficiency respondent disallowed all of the claimed deductions for the guns and ammunition.
There is no way this Court will sanction the deductibility of a private handgun collection under these circumstances. A handgun simply does not qualify as an ordinary and necessary business expense for an insurance agent, even a bold and brave Wyatt Earp type with a fast draw who is willing to risk injury or death in the service of his clients. We regard such expenses as extraordinary rather than "ordinary" to the usual and customary business of an insurance agent. Nor are they "necessary," i.e., appropriate and helpful, for the development or protection of his business. Indeed, petitioner's arguments for deductibility strike us as erroneous and just plain nonsense. Consequently, we hold that the amounts spent for the guns and ammunition are personal expenses which are nondeductible under section 262.
Wow, what a relevant response. I appreciate the feedback, and this was my thought, but I figured I would ask if others had done this. Again, thanks for the great response.
- Investor · Keller, TX · Member since 2015 · 81 posts · 22 votes8y
I have a simple philosophy. Don’t nickle and dime the irs. At some point we all stand a chance of being audited, so why push it? As for the price of personal safety, if you are worried, why are you contemplating these areas and do a few dollars of tax savings really come into it?
- Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes8y
If you need a gun to look at properties in bad areas , I would change where I was looking
- Rental Property Investor · Charlotte, NC · Member since 2017 · 298 posts · 232 votes8yMatthew Paul I would counter that one should always carry regardless as trouble doesn’t only call in “bad areas”. To each his own though. Also, crime mapping doesn’t always paint a complete picture. In fact, while I live in a good area, armed robberies occur with some regularity in the business district just blocks away from me. As to tax deductibility, I would defer to the previous, seemingly well written advice.
- Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes8y
@Jeshua Patrick I live 15 miles from Baltimore city . But this is Maryland and a handgun permit , well you have to be best friends with Jesus himself to even be considered .
- Rental Property Investor · Charlotte, NC · Member since 2017 · 298 posts · 232 votes8yMatthew Paul I feel for you. Unfortunately, not all have the ability to carry legally. I should have prefaced my previous statement with a where legal clause. In situations like yours, one should be all the more cautious and aware of their surroundings.
- Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes8y
@Jeshua Patrick I did some work in Balto city a couple years ago in a not so good area . Now I since you cant get a permit to carry in Md , I did the next best thing , hired an off duty Balto city cop to watch us work .
- Investor · West Monroe, LA · Member since 2015 · 196 posts · 70 votes8y
Originally posted by @Gary Baker:
I have a simple philosophy. Don’t nickle and dime the irs. At some point we all stand a chance of being audited, so why push it? As for the price of personal safety, if you are worried, why are you contemplating these areas and do a few dollars of tax savings really come into it?
Gary, I actually don't buy in the "dangerous" areas of my town, but I do live in a dangerous city nonetheless. We made the list this year for most dangerous cities, per neighborhoodscout.com. I am actually not big on guns, but I've found myself wishing I had one at times when entering vacant houses.
- Lynnwood, WA · Member since 2016 · 16 posts · 11 votes8y
While carrying a gun is the topic, what liability would you have to carry if you actually shot someone? Would you have to carry both liability on yourself and your business, and would there be a gun exclusion to any insurance we would buy anyway? Didn't think about this question until I read your post. Unless the property is yours when you enter? I am not a lawyer or legal anything, just curious...
- Investor · West Monroe, LA · Member since 2015 · 196 posts · 70 votes8y
Originally posted by @Nils Stewart:
While carrying a gun is the topic, what liability would you have to carry if you actually shot someone? Would you have to carry both liability on yourself and your business, and would there be a gun exclusion to any insurance we would buy anyway? Didn't think about this question until I read your post. Unless the property is yours when you enter? I am not a lawyer or legal anything, just curious...
Great thought, I am anxious to know this as well. Let me know if you find any info on this elsewhere!
- Real Estate Agent · Carmel, CA · Member since 2015 · 193 posts · 128 votes8y
just to be the devils advocate...
If you do have a gun, would you be willing to use it? most people get hurt with their OWN gun that is taken away from them.
Are you willing to take a life? Because if not, you have no business owning a gun.
(I am not trying to be mean. Just realistic)
- Investor · Saint Charles, MO · Member since 2016 · 118 posts · 91 votes8y
Originally posted by @Greg Hamer:
Are you willing to take a life? Because if not, you have no business owning a gun.
Just an FYI millions of gun owners are not "willing to take a life." That doesn't mean they "have no business owning a gun."
To OP - thanks for the creative thought. Also, consider a taser if a gun doesn't suit you well.
- Real Estate Agent · Carmel, CA · Member since 2015 · 193 posts · 128 votes8y
@Clint E., I respectfully disagree.
The sole purpose of a firearm is to take life. We might want to exclude hunters or similar uses, but generally speaking guns are for killing. It can absolutely be for self-defense, but they are the great equalizer when it comes to confronting and neutralizing the threat.
So I stand by my original statement. :)
But, as with much rhetoric, it is purely my opinion, and is therefore not worth much.
FWIW, I am a big 2A guy, and fully exercise my rights. :)
- Real Estate Agent · Carmel, CA · Member since 2015 · 193 posts · 128 votes8y
Originally posted by @Nils Stewart:
While carrying a gun is the topic, what liability would you have to carry if you actually shot someone? Would you have to carry both liability on yourself and your business, and would there be a gun exclusion to any insurance we would buy anyway? Didn't think about this question until I read your post. Unless the property is yours when you enter? I am not a lawyer or legal anything, just curious...
There are special insurance companies that specialize in gun liability insurance. Just in case you do shoot somebody. You will get arrested, you will (most likely) get sued by the surviving party/family, and you'll need a lawyer, even if you are justified.
- Real Estate Agent · Carmel, CA · Member since 2015 · 193 posts · 128 votes8y
To OP - thanks for the creative thought. Also, consider a taser if a gun doesn't suit you well.
I carry mace in my laptop bag. most people don't like the taste of OC spray.
- Rental Property Investor · Charlotte, NC · Member since 2017 · 298 posts · 232 votes8yClint Earnest I actually agree with Greg Hamer on this point. If you decide to carry you must first be sure that you will be willing to protect yourself. Many think they are but aren’t so if you don’t think you would be willing to take a life in defense of your own or someone else’s then you shouldn’t carry. Not saying you shouldn’t own for hunting or sporting purposes but certainly not for self defense. Why? What if the bad guy finds it on you and takes it from you? Now you have just armed someone who has no qualms about taking innocent lives because you negligently carried a weapon you had no intentions of ever using. I also want to speak to the insurance aspect of it. There are several products out there to protect you; however, I recommend proceeding with caution as many will only reimburse after an acquittal. I do believe that if you carry you should have self-defense insurance but make sure that it will provide you with the intended protection. I personally use USCCA as they pay until you are convicted or you max out coverage with no obligation to repay if you are convicted of a crime as a result of a self defense situation. Also, they don’t only cover firearms related or concealed self defense so if you used a knife or other weapon or open carry you would still be covered.
- Baltimore, MD · Member since 2018 · 169 posts · 82 votes8y
I had a carry permit in baltimore city. I let it go. You should not carry a gun which is something i learned quickly. Why?? 1. Only good as a reaction to something that has already happened, at which point your done. Best case is that they never know, worst is they take it and use it on you. Are u going in a questionable house gun drawn? carrying a gun is good as a deterent for those that know u carry, and thats it. Then what if you use it?? Ready for the legal consequences??? ...best way to avoid problems is to know how to avoid them. Know where u are, go with others, know your surroundings, dont put yourself in vulnerble situation.
- 8yJoseph DrutherPro MemberInvestor · Southern Pines, NC · Member since 2014 · 340 posts · 171 votes
@Austin Works I carry everywhere I go. Period. Get some training, go to youtube and watch the Active Self Protection channel. He is a great resource for debunking a lot of "talking points" and going over real life scenarios recorded on camera. That doesn't take the place of real life shooting and training at all, but is a great resource. I have a beautiful bride and three awesome kids that I want to be home with every night. I'd at least like to make sure I have a fighting chance in a life threatening situation.
@Jeff F. I understand your sentiment about knowing where you are, avoiding vulnerable situations, knowing the surroundings, etc. That is a HUGE part of well rounded training. The last thing you want is to get a gun thinking you are invincible and go looking for trouble. Knowing where and when 90% of the crimes happen and avoiding that is the most important part of self defense, and I stay as far away as possible!!! I don't carry looking for trouble, though. I carry ICE. I think your first statement, though, is very simplistic and I'd recommend you check out that same channel I mentioned above. I have gone into vacant houses where I just don't know what is going to pop out and am mentally and physically prepared to draw. One in particular I wound up buying had squatters in it and I made over 6 figures on that flip. Try to avoid bad situations as much as possible, but gosh darn it I just needed to buy that house lol.
Edit: as far as the write off is concerned, see your CPA :-) Stay safe
- 8yNed J.Pro MemberInvestor · Manteca, CA · Member since 2017 · 1k+ posts · 2k+ votes
Yeah, this discussion became about the moral and ethical issues around carrying a gun.....that's a discussion for a different place. :)
As for expensing it.......I would..... I would stick it into miscellaneous expenses or tools etc. The worst that will happen is that you get audited for some other reasons and you have to take it out....big deal. Don't get all stupid and try to expense an arsenal of guns and you will be fine.
- Investor · Coplay, PA · Member since 2015 · 404 posts · 315 votes8y
Ask your CPA how to expense your handgun.
You need to be wise about when you go into these places. Going into vacant buildings is always scary. If you do not have fear there is something wrong with you. The building itself may not be safe. Someone in the building is the second thing you need to worry about.
If you are going to carry do not carry an automatic. Carry a revolver. If you fear for your safety, **** the hammer. The person will hear that and leave you alone. TV leads you to believe that that the person will try and take the gun from you or shoot it out with you. They are looking for easy pickings. They do not want any trouble just like you. Attitude will carry you through most situations.
- Honolulu, HI · Member since 2017 · 247 posts · 315 votes8y
Originally posted by @Austin Works:
I am considering purchasing a small handgun for protection when going to look at properties in unfamiliar areas. Is this something I can write off at tax time as a business expense?
I have a friend who has an LLM (Masters of Law) in Taxation. He told me the first thing they learned was "cash does not equal income", the second thing was "everything is a deduction until you get caught".
- Renter · Las Vegas, NV · Member since 2018 · 278 posts · 71 votes8y
I'm not a CPA but have been a licensed tax-preparer that has filed over 500 returns for the IRS as well as several cities, counties, states, etc. I've prepared income taxes, state sales taxes, business licenses, fictitious names, etc.
When I was working one tax season for an EA in San Francisco years ago, one of my co-workers who was also a EA, told me about writing off pets as security in a home-based business I do believe that was a travel trailer to top things off.
I'm talking about writing off dog food, etc.
I assume security is a common write off for the right business set-up.
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