Travel Expenses, Tax Home

[geekgirldany]

Client called today about a new subcontracting job 1099 he has taken.

It is in California. He is currently living there and paying for a extended stay motel. His current contract will last for 5 months. He does come home occasionally to see his family. There is a possibility after the 5 months they will put him on as an employee and pay him for some subcontract jobs also.

Now I've been reading about travel deductions and the tax home.
I am a little confused on tax home.
Currently, since he is a 1099-misc subcontractor, I would assume his tax home would be where his business is located which is his family home. So any expenses including lodging would be deductible. Is this correct?

Seems as though the tax home rules are more for employees than subcontractors.

[solomon]

If he conducts no business back at his permanent residence, it might be iffy on an audit. What was he doing before the 5 month contract?

From Burski vs Commissioner - other cases follow this principle.

The requirement that the travel expense be incurred in the
pursuit of a trade or business means that the “exigencies of
business rather than the personal conveniences and necessities of
the traveler must be the motivating factors.” Commissioner v.
Flowers, supra at 474. Thus, the taxpayer must have some
business justification to maintain the first residence, beyond
purely personal reasons, to be entitled to deduct expenses
incurred while temporarily away from that home.

[appelman]

You should look carefully at...

and think carefully about the section on "No main place of business or work" on p. 3 of Pub. 463. Also, "Temporary Assignment or Job" on p. 4.