Travel expense deductible ?

[Art]

New client lives in town A goes to work at his regular job (main source of income as shift worker) in town B, then (most days) goes directly to his cattle farming operation that he operates at location C. He operates the cattle farm on leased land as a joint venture with another man who has a similar travel expense issue. The cattle operation started in 2010 so it has not yet turned a profit, but has generated about $ 5000 of gross receipts in 2011. He has a business plan to expand his operations by leasing additional grazing land.

Is the travel expense deductible as long as he goes direclty from his main job to the cattle farm ? Does the fact that he is self-employed with respect to the cattle farming business effect the tax treatment of the travel expense ? If he can deduct the travel expense, can he use the standard mileage method ?

Art

[AJsTax]

I would say:

Is the travel expense deductible as long as he goes directly from his main job to the cattle farm ? Does the fact that he is self-employed with respect to the cattle farming business effect the tax treatment of the travel expense ? If he can deduct the travel expense, can he use the standard mileage method ?

Art

Yes,
NO,
Yes,
the fact that he is self employed as long as it is a business is not a factor, Most self employed individuals have some deductible mileage.
Standard mileage is the best way usually. unless the vehicle is too large to qualify, but I doubt if he would drive that to work.

[taxea]

I figure both mileage and actual expenses. If TP uses mileage the first year he can elect either from then on. If he starts with actual expenses then he can't take mileage during depreciation period.

[Art]

Thanks for the quick replies. I will have the client list only the trips he makes directly from his regular job to the cattle farm.

[erchess]

wait

If he ever goes from home or some place other than work to the cattle farm wouldn't that mileage be deductible also? I know nothing about cattle but I would think they would need to be fed and watered if anything more than once a day.

[equinecpa]

If he ever goes from home or some place other than work to the cattle farm wouldn't that mileage be deductible also? I know nothing about cattle but I would think they would need to be fed and watered if anything more than once a day.

I think in this situation it would not be deductible if he doesn't maintain a home office the farm would be considered the place of business,not his home.

From publication 463:

Example 3.

You have no regular office, and you do not have an office in your home. In this case, the location of your first business contact inside the metropolitan area is considered your office. Transportation expenses between your home and this first contact are nondeductible commuting expenses. Transportation expenses between your last business contact and your home are also nondeductible commuting expenses. While you cannot deduct the costs of these trips, you can deduct the costs of going from one client or customer to another.

[oceanlovin'ea]

You can question him about what he does at home that relates to his cattle business. I'm sure he has to pay bills, order supplies, make phone calls from home. It will just depend on whether he has an office set up for his business.

Linda, EA