Sales expense?

[JG EA]

Client is a salesman for an equipment company and receives a W-2 from that company. He is also a limited partner in the same company. He demonstates the equipment to customers in order to sell the equipment. He has several acres of cultivated lawn next to his home. In order to cultivate the hill (used for the demonstrations) he put in irrigation, keeps up the grass, and so on.
I am having trouble thinking this though. Part of the acreage seems devoted to this sales part of his job.
I investigated the possibility of the partnership reimbursing him for his expenses, but these sales are directly related to his W-2 job. Since the land is part of his home, would you need to allocated time - a log - as to the business part? Would it be possible to depreciate a percentage of the irrigation system on a 2106?
Any ideas would be appreciated.

[Bird Legs]

sales expenses

If the reason for installing the irrigation system was for demonstration purposes, then, yes
it would be depreciated. Any expenses would be deducted also. All of this would go
on form 2106 subject to the 2% limitation.

[JON]

If audited

Any 2106 epxense info is always audited first by telling the taxpayer to get a statement from the employer that basicly says "these are ordinary and necessary expenses of his employment AND are not reimburseable by the employer". Once you provide that signed correspondence from the employer then they will look at the expenses and there substantiation..

[JG EA]

Thank you,

This is very helpful. Also a way to cement in the TP's minds that it is connected to the job. Also should I point out that if this part of the property is sold it will be taxed?

[JG EA]

Property used for 2106

So, to ask again - should I point out that if this part of the property is sold it will be taxed as business property?

[Bees Knees]

The land itself is not depreciable. The only thing that seems to be deductible that is connected to the property would be the cost of the irrigation system, which would be a 15 year land improvement depreciation expense.

If you want to write off ALL of that cost, it will take you 15 years. PLUS, you would have to argue the land it irrigates is used 100% for business. No playing football over there when the relatives come to visit. If it is not exclusively used for business, no deduction is allowed.