Tax Tip Tuesday: When Can You Deduct a Cruise?
Sea cruises can be fun. But can they also be tax deductible? Like with many things tax, the answer is “it depends.” Forget about getting a tax deduction for a pure pleasure cruise. You may, however, be able to deduct a cruise, at least part of the cost, if you attend a business convention, seminar or similar meetings directly related to your business while on board. Personal investment or financial planning seminars don’t qualify.
But there is a major restriction: In order to deduct a cruise, you must travel on a U.S.-registered ship that stops only in ports in the United States or its possessions, such as Puerto Rico or the U.S. Virgin Islands. If a sponsor promises you’ll be able to deduct a cruise, investigate carefully to make sure it meets these requirements.
If you go on a cruise that is deductible, you must file with your tax return a signed note from the meeting or seminar sponsor listing the business meetings scheduled each day aboard the ship and certifying how many hours you spent in attendance. Make sure to get this statement from the meeting sponsor. Your annual deduction for attending conventions, seminars or similar meetings on ships is limited to $2,000.
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