Q. If we bought a home where my Mom lives and hire her as our agent and property manager, will our visits to see her be deductible? Of course, there would be plenty of personal reasons for these trips. But, could we still deduct things like flight costs, car rentals, some meals? Can you mix a business trip with personal time and still write it off?
Mixing Business Trip with Personal Time
A. You can deduct the costs of visiting your rental property that’s outside the metropolitan area where you live. You can deduct your airfare, car expenses, hotel bills, your meal costs, and other expenses. If you plan your trip carefully, you can even mix landlord business with pleasure and still take a deduction.
But, to deduct the cost of such trips, they must be primarily for your rental activity. This means that you must have a rental purpose in mind before starting out. You must actually do something for your rental activity while you’re away. Examples include:
- traveling to your rental property to deal with tenants, maintenance, repairs, or improvements
- traveling to your rental property to show it to prospective tenants
- traveling to see people who can help you operate your rental activity, such as attorneys, accountants, or real estate brokers.
If you spend all your time at your destination on rental business, you may deduct 100% of your expenses. This doesn’t include meal expenses, which are only 50% deductible.
Yet, things get more complicated if you mix business and pleasure. You may deduct 100% of your transportation expenses including airfare, car expenses only if you spend more than half of your time on rental activities while at your destination.
If you spend more time on personal activities than on rental activities, you get no transportation deduction. You may also deduct the destination expenses (lodging, meals, etc.) you incur on days when you do rental-related tasks. Expenses incurred on personal days at your destination are nondeductible personal expenses.
If your trip is primarily a vacation, the entire cost of the trip is a nondeductible personal expense.
MileIQ’s blog does not constitute professional tax advice. You should contact your own tax professional to discuss your situation.