If you’re an absentee landlord (one that owns rental property out-of-town), you may need to travel to it once in a while for any number of legitimate reasons higlighted below. This article reviews how you can deduct most of the costs associated with your trip as long as it involves an overnight stay and directly pertains to the management or maintenance of the rental property.
A staggering 100% of travel within the United States (except 50% of food and beverages) is usually tax deductible as long as you spend the majority of your time dealing with property management or maintenance issues. So trying to deduct a vacation involving the entire family traveling to Walt Disney World just because you need to stop by and check on your rental in Orlando will not count. While it’s okay to attend special events and participate in leisure activities such as a wine tasting festival, NASCAR, Niagara Falls, Disney, etc., such destinations cannot be the obvious purpose of the trip or take up the majority of your time spent out-of-town.
Examples of legitimate reasons for travel include:
- Meeting with existing tenants about moving in, moving out or other issues.
- Personally performing or supervising maintenance, repairs, or improvements
- Visiting trade shows, suppliers or vendors to acquire materials
- Meeting with new applicants for tenancy
- Attending property management classes, seminars and conventions
- Meeting with industry professionals such as real estate agents, property managers, attorneys and accountants
What types of travel expenses are deductible?
It is important to note that ordinary expenses usually qualify, but if you’re going to charter private jets, book presidential suites and rent luxury sports cars, the IRS will most likely take issue with such extravagant spending. Note: Any expenses related to your time spent vacationing or entertaining the family are not permissible deductions.
Examples of permissible expenses:
- Commercial airline, train and bus tickets
- Airport shuttle service
- Car rentals
- Checked baggage fees
- 50% of food and beverages (and tips)
- Hotel or motel stays
Driving your own car? You can deduct the standard mileage rate or your actual expenses. See Deducting Automobile Expenses for more information.