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socrateaser, Lawyer
Category: Tax
Satisfied Customers: 37839
Experience:  Retired (mostly)
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My sons live in Vancouver and I live in Los Angeles. I want

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My sons live in Vancouver and I live in Los Angeles. I want to legitimately write off my travel expenses when I go up to see them and they come down to see me.

I have clients up in Vancouver, so writing off that is easy. I also generate income by shooting, editing and posting videos on YouTube with my sons, so there is legitimacy there.

What suggestions do you have for making these expenses audit proof?

All travel expenses which are ordinary and necessary to the production of income are deductible. IRC 162(a)(2). Meals and entertainment expenses are generally not deductible, unless there is a bona fide business need for the expense.

IRS first-line auditors are interested in documentary evidence (e.g., logs, receipts, etc.). If you have documents proving that you paid the expense and describing the purpose, then the auditor will allow the deduction -- otherwise not. It's actually a lot more cut and dried then you may think. Auditors are not permitted to act as a judge. They either find that a deduction is documented and satisfies the requirement of ordinary and necessary expense -- or, it doesn't.

If you stick with the cost of travel (air fare, taxi, rental car, parking, hotel), and stay away from charging meals and entertainment, and you document your expenses, then you will survive an audit. Simple as that.

Hope this helps.
Customer: replied 3 years ago.

Thanks. Would I need to have a service agreement with my sons and be paying them?


Or would us producing videos together which generate income be sufficient?

If you are producing video together for profit, then you and your sons are engaged in a general partnership, which is reported on IRS Form 1065. It's always a good idea to have a written agreement -- not for the IRS, but because where money is involved, ambiguity leads to disputes. You don't have to use a partnership. You can employee your sons, or hire them as independent contractors, or partner with them -- or, create a corporation or LLC and distribute shares.

Hope this helps.

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