Accepted Answer

Hello lullaby,

No, this would not be an allowed write off for your LLC. In order for a business expense to be allowed, the IRS requires that it be both ordinary and necessary for your trade. Purchasing a retreat for your staff members to gather and/or relax or to entertain clients would not typically be an ordinary and necessary business expense in most trades. Perhaps if you were in the business of selling timeshares, you might have one timeshare unit of your own for prospecitve clients, as this would be directly related to your trade, but that is about the only time that an expense like this would be allowed.

There have been several court cases on issues of this nature. Probably the most famous one involved a tax consultant who purchased a luxury yacht and then tried to write it off as a business expense. He claimed that he advertised his business on the yacht and entertained clients. The tax court immediately through out his deduction, and they would do the same in the case of the deduction you are proposing for a retreat.

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Thank you lullaby.

Expert:	Merlo
Pos. Feedback:	99.8 %
Accepts:
Answered:	8/11/2009

Accountant

25+ years tax consulting. Specializing in returns for US citizens living abroad