Tax deductions for visiting out of state property

Rental Property Investor · Charleston, SC · Member since 2018 · 29 posts · 13 votes

So, I am considering a long term rental property in Florida. We live in Charleston, SC. In addition to having cash flow, this would be a great vacation spot for us. The question is: What are the tax deductions available for us to visit the property once or twice per year?

I’m certain that someone on BiggerPockets has already worked this out. 😄

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Filipe Pereira

Property Manager · Windsor Locks, CT · Member since 2016 · 1k+ posts · 1k+ votes

@Patrick Owens You also want to be careful with how you plan it. My understanding (I'm not a CPA) is that if you plan business related tasks on Monday and Tuesday and plan on spending Wednesday, Thursday, and Friday at the beach, you can't claim the hotel expenses for Wed-Fri. In that case you want to "book end" your business tasks - I.e. " I went to visit my property on Monday to do a walk through and my contractor could only meet me on that Friday".

I'm not telling you how to cheat the system, but that's what I read in a tax book last year.

@Patrick Owens

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Basit SiddiqiBusiness Member
Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
7y
@Patrick Owens

For a payment to be deductible, it needs to be ordinary and necessary(and reasonable) for your business.
Traveling to see the condition of the property is a valid business deduction for a real estate investor.

With that said - You must plan accordingly for the travel to be deductible.

You can't go to Florida to go to the beach and then make a last second decision to visit the property and then claim that as a deduction.
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Sam Shueh
Real Estate Agent · Cupertino, CA · Member since 2016 · 4k+ posts · 1k+ votes
7y
Doable. Suggest you talk to your HR Block person.

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Patrick Owens
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Rental Property Investor · Charleston, SC · Member since 2018 · 29 posts · 13 votes
7y
@Basit Siddiqi
Hey! Thanks for the quick reply.
Planning for the visit isn’t a problem. Notify the tenant (through the property manager). I am curious about the itemized deductions: mileage? hotel? other related expenses?
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James Rainwater
CPA & Tax Planner · Member since 2018 · 8 posts · 5 votes
7y
It's all about the documentation. You can deduct the travel to and from (mileage or airfare), you can deduct lodging for the day of business as well as a day on either side for travel. You have to document what business is being conducted to get properly claim the business days versus the personal days. Meals on business or travel days would be deductible, but not on vacation days.
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Filipe Pereira
Property Manager · Windsor Locks, CT · Member since 2016 · 1k+ posts · 1k+ votes
7y
@Patrick Owens You also want to be careful with how you plan it. My understanding (I'm not a CPA) is that if you plan business related tasks on Monday and Tuesday and plan on spending Wednesday, Thursday, and Friday at the beach, you can't claim the hotel expenses for Wed-Fri. In that case you want to "book end" your business tasks - I.e. " I went to visit my property on Monday to do a walk through and my contractor could only meet me on that Friday".

I'm not telling you how to cheat the system, but that's what I read in a tax book last year.
@Patrick Owens
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Ashish AcharyaBusiness Member
CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
7y
Originally posted by @Patrick Owens:

So, I am considering a long term rental property in Florida. We live in Charleston, SC. In addition to having cash flow, this would be a great vacation spot for us. The question is: What are the tax deductions available for us to visit the property once or twice per year?
I’m certain that someone on BiggerPockets has already worked this out. 😄
Good advice already by colleague up here.
Actual costs of travel (e.g., plane fare, cab to airport, etc.) are deductible for out-of-town business trips. You're also allowed to deduct the cost of meals and lodging. Your meals are deductible even if they're not connected to a business conversation or other business function. As with all deductible meals, only 50% of the cost is allowed.Cant be Lavish or extravagan.
Personal entertainment costs on the trip aren't deductible, but business-related costs such as for dry-cleaning, phone calls, and rentals are.
Some allocations may be required if the trip is a combined business/pleasure trip, for example, if you fly to a location for five days of business and stay on for an additional period of vacation. Only the cost of meals, lodging, etc., for the business days are deductible—not for the personal vacation days.
On the other hand, with respect to the cost of the travel itself (plane fare, etc.), if the trip is “primarily” business, the travel cost can be deducted in its entirety and no allocation is required. Conversely, if the trip is primarily personal, none of the travel costs are deductible. An important factor in determining if the trip is primarily business or personal is the amount of time spent on each, although this isn't the sole factor.
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Patrick Owens
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Rental Property Investor · Charleston, SC · Member since 2018 · 29 posts · 13 votes
7y
@Ashish Acharya
Thank you so much!
This is exactly what I was searching for.
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Patrick Owens
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Rental Property Investor · Charleston, SC · Member since 2018 · 29 posts · 13 votes
7y
@Filipe Pereira
Great information!
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