money management program

[Bill Tubbs]

Client has been a long-term landlord (Sch E). This year he purchased the "Money Merge Account" from United First Financial: http://www.unitedfirstfinancial.com/index.html

This "product" is a method to pay down debt faster. He spent $3500 and says that he only utilizes this for his rental units.

Is this all deductible now since it was all paid in 2008, or prorated over a number of years?

Thanks,
Bill

[Nashville]

Amazing

Amazing what people will pay to accomplish something they could do on their own.

I suppose there have been longer stretches of imagination to consider something "ordinary and necessary" so if it were mine, I think I would classify this as an intangible asset and write it off in proportion to the reduction in the loan balance.

[ChEAr$]

Agree

Amazing what people will pay to accomplish something they could do on their own.

I suppose there have been longer stretches of imagination to consider something "ordinary and necessary" so if it were mine, I think I would classify this as an intangible asset and write it off in proportion to the reduction in the loan balance.

with the Senator from Tennessee.

[erchess]

Wow

I looked at the site and I can't believe what people will pay for in essence quantification of exactly how much they can save by increasing the rate at which they pay off debts by a given amount. However, I think that "financial education" is deductible by a landlord who uses the knowledge gained in his rental business and certainly getting the properties paid off faster counts as use in his rental business. You might even make a case for deducting this financial education on the basis of the intent with which he paid for it even if he did not in fact make any gainful use of it.

I think the suggestion of deducting the cost in proportion to the increased debt payment each year is the conservative approach and one many of my clients would choose since short of not deducting the expense at all it is the course of action most likely to survive an audit unchanged. With a more aggressively inclined client I might even write it off all in the year paid just as I write my own continuing education off in the year paid even though some has no real value at all to my practice, some has value pretty much limited to the next tax season and some has enduring value. I think pretty much all education is like that and generally educational expenses are deducted in the year incurred or paid.

However, I think I am in the wrong business and need to compete with this outfit but the problem is that I am not a charlatan. The other day my power steering went out while I was driving to see a particular client. I told him that I was going to bill him for the repair since obviously it was his fault and he laughed as if he thought i was joking I took Charlatan 101 in college but I was encouraged to drop it at mid term because I was such an unpromising student.

[Bill Tubbs]

Thanks

I considered both expensing it and amortizing it over some life. Client is the more aggressive sort (wanting to just expense it) and I couldn't see it as a depreciable asset as the use of the site/system is open-ended. So, we expensed this.

Thanks for your insights.

Bill