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If he's going from his second home back to his office, or place of business, that is a commute and no expense will be deducted.
Here's a good discussion about the difference between commuting and travel: CLICK HERE
The only time it's travel is if you are going to a temporary work place that is outside your tax home
He doesn't view it as commuting. I'm trying to convince him that it is. He thinks since he is doing business in both locations he should get the deduction.
For example, if a meeting was held at a convention center by the second home, the drive from the primary residence to the second home would be deductible if he was going there for a business purpose.
No, you only get the deduction if you are doing work at a temporary workplace away from your tax home.
That is what I've tried to tell him. I will use what you sent to show him.
I know it's sort of a grey area, but you don't want to take commuting miles when they aren't deductible.
He has also said his second home is an investment and he is going to check on it. Same answer...commuting?
Yes. That is commuting. It's his second home.
Good argument, but it wouldn't fly with the IRS
The investment has to be generating you income in order for you to even start deducting expenses.
So, if it was a rental property he would have rental income and could deduct the mileage.
Okay. So he won't get a business deduction for excess mileage when he drives to his second home so he has a car to use for business meetings at his second home, correct?
That is correct
Perfect. How do I treat it if he wants the company to pay these costs? Are these distributions to a partner?
They would be non deductible expenses. You would have a book-tax difference
You could treat as an owner draw
We don't have draws; instead we have distributions.
But if they are non deductible expenses, he's essentially creating income for himself...which I don't know why he would be doing that
Or would we issue him a 1099?
Great question! He thinks he gets the deduction.
He does not get a deduction.
You would send him a 1099, yes
Okay. Am I able to get a copy of this transcript to show him?
You can print it using the browser's print function
Excellent! Thank you very much. I appreciate your help!
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