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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 11381
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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My husband is self-employed. My husband and I own a second

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My husband is self-employed. My husband and I own a second home. The home is considered a second home/vacation home. We do not collect rent. My inlaws are currently living there. My husband had to travel for his business this past year and stayed overnight at the house a total of 10 times so that he did not have to pay for a hotel. Can we have the business pay us for the 10 nights that he stayed there? Are there any potential pitfalls with us taking this deduction? He was legitimately traveling for business.


Hi, I can help with this.

Sure, if the trips were for business, you can deduct all the normal travel expenses that were incurred for business purposes.

As with any other deduction, you wouldn't be able to deduct expenses that weren't actually paid (like some, approximation of what the hotel costs would have been had he not stayed at the house) but all of the other travel expenses are deductible.

And, as I'm sure you know, if you have a mortgage on this second home, you can deduct the mortgage interest.



Hope this helps

lane


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Hi Heather,

 

 

 

As a follow-up, here's an excellent article on business travel expenses:

 

 

http://biztaxlaw.about.com/od/taxdeductionsatoz/a/travelexpenses.htm

 

 

 

Lane

Customer: replied 4 years ago.

Hi, If I we have the business write a check for $100 per night to us personally for the use of the home, is that considered an actual travel expense? We don't have a mortgage on the property, so we don't have any interest to deduct. I should also mention my husband's business is an S-Corp.


If the business is a c-corp that will work.

So, sorry ... don't shoot the messenger here, but if the business is an S-Corp, an LLC, a partnership or a sole proprietorship (where there the business is a pass through,and flows directly to your personal tax return, the IRS wont's allow that).

In that situation, you're just paying yourself.

Now, if the business is a C-Corporation, or a Trust, that pays it's own taxes (at C-Corp, or Trust, tax rates respectively, on their own return) thne it will work ... because you have two different taxable entities there... ((1) you, on your Married Filing Jointly return and (2) the C-Corp on its Corporation tax return).

But, again, if your business is a pass-through entity such as a sole proprietorship, an S-Corp, an LLC or a partnership (where the profit or loss is not taxed at the business level, but rather flows through to line 12 - business income or loss - of your personal tax return, you would be effectively paying yourself without taxing the income.



Hope this helps

lane


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Lane and other Tax Specialists are ready to help you

Thank you so much Heather!


Hopefully having the facts'll help you see around some corners.


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Thanks again,
Lane

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