Tax Tip Podcast for Real Estate Professionals – U.S. Deductible Travel

Tax Tip Podcasts for Realtors, Brokers, and Real Estate Professionals

For travel within the 50 states and the District of Columbia, the treatment of travel expenses (includes Realtors, Brokers, and Real Estate Professionals) depends on how much of the trip is business related. All travel expenses can be deducted when the taxpayer’s trip is entirely business related and, for expenses incurred in 2018 through 2025, the deduction is not being taken by an employee as a miscellaneous itemized deduction subject to the 2-percent of adjusted gross income limitation. No travel expenses can be deducted when the trip is entirely personal.

If the taxpayer engages in both business activities and personal activities on the trip, the following rules apply:

(1) If the taxpayer’s trip is primarily for business reasons but he also spends time on personal activities during the trip (e.g., a personal side trip or an extended stay for vacation), the travel costs for getting to and from the business destination are deductible. The business-related expenses incurred at the business destination are also deductible.

(2) If the trip is primarily for personal reasons, the travel costs for getting to and from the destination are not deductible. However, any business-related expenses incurred at the destination can be deducted (Regulation Section 1.162-2(a) and (b)(1)).

The determination of whether a trip is primarily for business or personal reasons depends on the particular facts and circumstances. A key factor in making this determination is the relative amount of time spent on business activities and personal activities during the trip (Regulation Section 1.162-2(b)(2)).

Brenda Fitch Real Estate Professional
Brenda Fitch Real Estate Professional

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(Updated 03/16/2021 08:05)

Published by Don Fitch, CPA

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