Author Topic: Travel Deductions to "inspect" your rental properties and meet with Property Mgr  (Read 1285 times)

Slow2FIRE

  • Bristles
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  • Posts: 266
We have a rental property in the Denver area which is profitable.  Our current tenants are ending their lease and we would like to visit the property before we have the next tenants move in.

I'd like to be able to deduct the cost of flights, car rental and reasonable meals (something like sandwiches at subway and maybe breakfast at a diner).
I'd also like to be able to deduct the costs for both myself and my wife.

-What steps should we be taking to allow us to deduct a short trip (overnight or even just a day trip with a flyin in the morning and flyout in the evening) to "inspect" our rental property?

1. Should I make sure to have a written scheduled appt with our property manager (in email) and would that be sufficient?
2. What can I do to decrease the chances of triggering an audit?
3. Do I need to be more of an active participant in the business beyond just a meeting with the property manager and inspecting the property?

Errol Flynn

  • 5 O'Clock Shadow
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  • Posts: 14
You should be fine if you document everything and can meet the following 3 requirements for qualified deductions:
  • Was the primary reason for the trip to visit your rentals?
  • Did you spend more than 50% of the trip doing business?
  • Did you have meetings or appointments in place before you left?
I think you can generally deduct only 50% of your meal cost, though. I would check out  https://www.biggerpockets.com/renewsblog/2015/06/28/guide-deducting-travel-expenses/ and BP in general for easily digestible articles on the subject. Brandon Hall and Amanda Han both do a great job of breaking down what you can and cannot deduct for rental property-related expenses.

And I would rethink the single day trip--from the article: For tax purposes, you may deduct virtually all of your travel expenses related to travel outside of your tax home. There are two key criteria to deduct this type of travel: you must travel outside your tax home and you must stay overnight at least one night. If you do not stay overnight, the trip is not considered “travel.”