I have read through several threads and bits on the net regarding the use of personal aircraft for corporate travel, but my situation is different. I am involved in real estate. I have a real estate license(legally an independant contractor) and I do a decent amount of investing in the real estate field as an individual. I will be forming an LLC soon as I have about reached(exceeded really) my personal threshold for lawsuit liability.
As an independent contractor and a "real estate profesional" in the eyes of the IRS, there are some favorable rules for us regarding what I can deduct as business expenses. My curiosity is involving my new set of rules regarding the to be formed LLC that officially puts me in business as a real estate investor. I currently live on the Jersey Shore, own several properties here, as well as a large chuck of land in Vermont near Okemo that will be sectioned off and most of it sold off over the next bunch of years. I will most likely keep the remaining chunk of acreage for many years to come, that will include a residence that will be active the entire time as a rental property. The property just happens to be within minutes from a fairly large well maintained regional airport(in Springfield)
My wife and I have also been seriously considering a move to Florida in a few years. If we do that, I will almost certainly retain atleast two of the investment properties here in NJ, one of which is a nice seperated two family that I would be able use during the summers if we decide to spend the sailing season up here, plus at any time I wish to fly up for any reason. That's basically where I'm coming from.
So say we move to Florida. Aside from whatever I do real estatewise there, I will own investment property in both NJ and Vermont. Would it be fair to say that I would be able to deduct much of my personal aircraft travel and maintenence expenses as pre tax business related traveling expenses similar to what I am very familiar with regarding vehicle travel for the same purposes? Even though I would have family to visit in Jersey, I would certainly be visiting and checking in to my investment property, especially since I would be staying in one of them while I'm up here. Same goes for Vermont, though some of the reason for going could be considered for entertainment purposes, a substancial part of any trip up there is for direct business reasons. It would seem that both locations fall pretty clearly into the realm of business related travel.
Another thing that is commonplace with real estate investors is the ability to consider a fairly wide range of other expenses as business related, and as such, considered pre tax expenses. Such as personal travel. The burdon appears to be fairly small, requiring only a modest amount of the actual time spend visiting one place to be devoted to true busines activities. I am always interested in looking for potential areas to invest in. And by my very nature, whenever I go somewhere new, I spend a bunch of time researching and checking out the investment potential of the area. It is usually the part I enjoy the most when away(I have issues, I know). I tend to think of any new area as some sort of recon mission for a potential future deal.
So in reality, everywhere I travel to, I seem to very legally fit into the IRS's definition of business travel, and I routinely bring home the research documentation to put in my files to prove it. I have yet to claim any of my (mostly)personal travels as business expenses, but once the LLC is formed, it sure seems to make sense. With a plane on hand, my wife and I are looking forward to making lots of trips together as we both work for ourselves and have flexible schedules. If we are in Florida, there will be many trips back and forth from there to NJ(also within 5 minutes from the local airport) and Vermont alone, never mind everywhere else we'd like to scoot off to.
I have another meeting scheduled with my accountant tomorrow afternoon, but I'd like to get some opinion for here if possible before hand to see if my current thinking on the subject makes sense. I try not to go out of my way to bend the tax rules in my favor and have skipped out on plenty of things that I could have likely easily gotten away with in the past, but this type of use appears to fit squarely into a business expense given my situation.
George
As an independent contractor and a "real estate profesional" in the eyes of the IRS, there are some favorable rules for us regarding what I can deduct as business expenses. My curiosity is involving my new set of rules regarding the to be formed LLC that officially puts me in business as a real estate investor. I currently live on the Jersey Shore, own several properties here, as well as a large chuck of land in Vermont near Okemo that will be sectioned off and most of it sold off over the next bunch of years. I will most likely keep the remaining chunk of acreage for many years to come, that will include a residence that will be active the entire time as a rental property. The property just happens to be within minutes from a fairly large well maintained regional airport(in Springfield)
My wife and I have also been seriously considering a move to Florida in a few years. If we do that, I will almost certainly retain atleast two of the investment properties here in NJ, one of which is a nice seperated two family that I would be able use during the summers if we decide to spend the sailing season up here, plus at any time I wish to fly up for any reason. That's basically where I'm coming from.
So say we move to Florida. Aside from whatever I do real estatewise there, I will own investment property in both NJ and Vermont. Would it be fair to say that I would be able to deduct much of my personal aircraft travel and maintenence expenses as pre tax business related traveling expenses similar to what I am very familiar with regarding vehicle travel for the same purposes? Even though I would have family to visit in Jersey, I would certainly be visiting and checking in to my investment property, especially since I would be staying in one of them while I'm up here. Same goes for Vermont, though some of the reason for going could be considered for entertainment purposes, a substancial part of any trip up there is for direct business reasons. It would seem that both locations fall pretty clearly into the realm of business related travel.
Another thing that is commonplace with real estate investors is the ability to consider a fairly wide range of other expenses as business related, and as such, considered pre tax expenses. Such as personal travel. The burdon appears to be fairly small, requiring only a modest amount of the actual time spend visiting one place to be devoted to true busines activities. I am always interested in looking for potential areas to invest in. And by my very nature, whenever I go somewhere new, I spend a bunch of time researching and checking out the investment potential of the area. It is usually the part I enjoy the most when away(I have issues, I know). I tend to think of any new area as some sort of recon mission for a potential future deal.
So in reality, everywhere I travel to, I seem to very legally fit into the IRS's definition of business travel, and I routinely bring home the research documentation to put in my files to prove it. I have yet to claim any of my (mostly)personal travels as business expenses, but once the LLC is formed, it sure seems to make sense. With a plane on hand, my wife and I are looking forward to making lots of trips together as we both work for ourselves and have flexible schedules. If we are in Florida, there will be many trips back and forth from there to NJ(also within 5 minutes from the local airport) and Vermont alone, never mind everywhere else we'd like to scoot off to.
I have another meeting scheduled with my accountant tomorrow afternoon, but I'd like to get some opinion for here if possible before hand to see if my current thinking on the subject makes sense. I try not to go out of my way to bend the tax rules in my favor and have skipped out on plenty of things that I could have likely easily gotten away with in the past, but this type of use appears to fit squarely into a business expense given my situation.
George