Tax Law (Questions About Taxes)/Write-off


I have a 3 vacation rental properties.  My family will be going on vacation.  We will be renting a vacation rental property.  We will be looking for ideas we can bring back to our rentals.  Can I write anything off, since this is the business I'm in?

I want you to succeed. I appreciate that you have given direction to your plan. You see an opportunity and want to take it. But Scott, you have to execute perfectly. Tax application is a grey area. Everyone has what they believe to be hard and fast lines that cannot be crossed. But if you overlap everyone's notions you will find vast discrepancies, some accountants would think you can't pay enough taxes, while other would claim that any deduction is a good one to exploit.  Your accountant has some of these hard and fast "Lines", tax attorneys have some, your neighbor, brother in law, and co-workers have them, The person passing out forms at the IRS office has them, IRS Agents, Auditors, and their supervisors have some, each person in the legal department at the IRS has them, you have them and I have them. But the only ones that matter for you are yours and, if you are audited, the Auditor's and their supervisor's.

Here is the real heart of the issue: you can only deduct what you BELIEVE to be a "Reasonable and Necessary business expense". You don't have to get the auditor to believe you need to convince them that you believe.

I said you had you had to execute perfectly. Scott, when you tell me that it is a vacation, then I don't believe that you believe it is a reasonable and necessary business trip.

So in this grey area, where some can justify deductions and others cannot, it all boils down to you. Can you sell it if audited? If not don't try.

If you are going to try, then you need support, Documentation, Documentation, Documentation.

If I were going to blaze that trail.. .

(And this me, my willingness to claim that deduction. This should not be used as a general form for the masses, because it still comes down to being able to sell it to the auditor and if the auditor won't accept, then the Auditors supervisor has to be sold on the fact that you believe it is a reasonable and necessary. . .)

Here is where hardened training comes in:

If I was telling the story it would go something like this.

XYZ corporation, of which I am the president, has 3 real estate properties. Having given careful consideration to maximizing cash flow and profits for the company, the company has determined that renting them on a daily/weekly vacation rental would provide the greatest return. These specific properties have features that make them unique and possibly of extra value.

The corporation needs to study the VRBO market and assess price points, vacancy ratios, along with potential marketing options.

A review of the current market shows a limited number comparable properties in other places.

The corporation has decided that an onsite rental is the best way to assess the markets, and see the inner working of a successful competitor. This knowledge cannot be gleaned from reading marketing materials or general real estate data.

Therefore, The corporation has decided that I and m wife will go through all phases of the VRBO process.. . .

Just as a starting point.

Hope that helps get you moving in the right direction.


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Richard Fritzler


Specializing in Business and Corporate taxation. Comparing the advantages and requirements of different business entities, such as Sub-S Corporations, LLC`s, Partnerships (Both Limited and General), Doing Business as a Sole Proprietor, or Using a C-Corporation. Issues regarding K-1 distributions, 1040, schedule C, 1120, 1120s. Are you considering domiciling a Corporation in a low tax state? I can review the benefits and misinformation that exists.


I have been in the business of assisting business owners in reducing their taxes and liability since 1986.

National Small Business Owners Association.
Contributing author to "The Corporate Standard Newsletter".

Contributing author to "The Corporate Standard Newsletter".

I have been in the business of assisting business owners in reducing their taxes and liability since 1986.

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