Does this seem like my CPA is overly conservative

Question

I really like my CPA, last year was the first time using her. I feel that she might be a overly conservative and not help me write off as much as i should. Does anyone get to write off traveling and looking for new rentals? If i travel to another state to look at a house, i was told i can only write that off if i actually buy one. Does that seem correct to everyone?

Michael Plaks · Answer

Stop giving away these strategies, Bill! I charge $49,995 for a weekend boot camp in Moscow, where I teach my students how to deduct the cost of the training, family and pets included. You're spoiling my gig!

(JK, if this was not obvious)

Bill B. · Answer

That is correct. Otherwise everyone would look at possible rentals in Hawaii or Fiji, or Australia. They might even take along their family as consultants.

If you buy those expenses become write offs, not until then.

Loren Clive · Answer

No. And there are differences in how conservative CPAs are. I would encourage you to read the laws yourself, the IRS bulletins, and find a CPA who shares your mindset.

I once changed CPAs due to a similar issue and saved $80k refiling three years' tax returns.

Pat L. · Answer

There's ALWAYS a 'seminar' being held in some vacation location, even cruises have been known to have them :)

Harrison Sharp · Answer

@Sean Harrison

Deducting cruises is a sure fire way to get audited and lose. Deducting the cost to travel to view a property is fine.

Brian M Sweeney · Answer

@Michael Plaks sign me up for two tickets to your Moscow bootcamp..check is in the mail.

Ashish Acharya · Answer

if you think about it it is actually good do not deduct those cost.

I am not sure on what level of your investing you are right now. But as you buy more of the rentals, it will be harder and harder to qualify for a loan. The more you deduct, lesser your DTI will be. I tell all my clients/friends not worry about the deductions right now. If you want to be a successful Real Estate Investor, saving couple thousand (or less actually) on taxes when you begin made hamper your abilities to scale rentals in the future. You need to make sure that your tax return is that of an investor, not someone who is trying to save every Penney.

I would rather Capitalize all the cost whenever possible and then deduct over the time. You are not losing deductions, you’re just not doing it right now and going negative on your net income. This is a high-level strategy and everyone is different.

Natalie Kolodij · Answer

It's weird that you assume one tax pro's published statement is  more true than another one's.

I don't have time to read through it all

But deducting an activity ON a cruise is hard- ship has to be US registered and only visit US ports.

You can deduct a cruise TO an event as luxury water travel. Also some nuance there.

Edited to add that my "interesting" proof comes from IRS Pub 453 - not just some person's blog.

Natalie Kolodij · Answer

Very rarely is a seminar on a cruise deductible.

But also, that's a difference circumstance. If you're already in business- and attending a seminar or such directly related to your business that's deductible.

vs.

If you don't own a rental somewhere yet- you do not have a business there yet. You can't deduct business costs for traveling there.

Does this seem like my CPA is overly conservative

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