Itinerant Travel for Rental Property

[Art Knapp]

Taxpayer lives full time in an RV. Taxpayer does not have a permanent place of employment. Taxpayer does not have a permanent place that he parks the RV. His state of domicile is South Dakota. He is a traveler, never spending significant time in any one area.

Taxpayer owns rental properties. If he is currently in Ohio and needs to travel to San Antonio on rental property business matters what is deductible:

1) If he travels with his RV (his home) from Ohio to San Antonio.
2) If he leaves the RV (his home) behind and travels by car or some other method?

If you have any citations on a similar issue, I would appreciate references

[Bees Knees]

TTB, page 8-11 says:

Transient workers. If a taxpayer does not have a regular place of
business and does not have a regular place to live, the taxpayer
is considered a transient worker and the tax home is wherever
there is work. No travel expenses can be deducted because the
taxpayer is never considered to be traveling away from the tax
home.

Using the WebCD, the citation used by TTB for the above is chapter 1 in IRS Pub 463. It includes factors used to determine whether your client is a transient worker, or whether your client has a tax home.

[Art Knapp]

Thanks Bees Knees, but I already knew that. It does not really answer the specifics of my questions. Please read the question again and reply to the specifics.

My position for the second part of my question is that the taxpayer is away form his home since he is leaving it behind and traveling by car or some other method.

[winnie]

Don't see how leaving his RV at a location for a limited time while traveling by car changes his situation. If he is making Ohio his home and will stay there, then that is different. I concur with Bees.

[Bees Knees]

Thanks Bees Knees, but I already knew that. It does not really answer the specifics of my questions. Please read the question again and reply to the specifics.

My position for the second part of my question is that the taxpayer is away form his home since he is leaving it behind and traveling by car or some other method.

Why would you tell him to leave his RV behind? For a tax deduction?

This is the kind of advice that irks me. When we as tax professionals think the whole world revolves around tax deductions. This guy is living his dream. He is traveling the country in his RV. Visiting places he has always wanted to see. His home is on wheels. He can leave and go to the next place anytime he wants to. He is no longer punching a time clock or living in the rat race the rest of us are stuck in.

OK, so he does own some rental property. Stops in from time to time just to make sure everything is OK.

Are you really going to suggest he leave his RV behind and travel hundreds of miles in his cramped little car just to maybe qualify for a tax deduction?

[Jesse]

Why would you tell him to leave his RV behind? For a tax deduction?

This is the kind of advice that irks me. When we as tax professionals think the whole world revolves around tax deductions. This guy is living his dream. He is traveling the country in his RV. Visiting places he has always wanted to see. His home is on wheels. He can leave and go to the next place anytime he wants to. He is no longer punching a time clock or living in the rat race the rest of us are stuck in.

OK, so he does own some rental property. Stops in from time to time just to make sure everything is OK.

Are you really going to suggest he leave his RV behind and travel hundreds of miles in his cramped little car just to maybe qualify for a tax deduction?

I think you're being a little harsh here. Although I do agree w/ you, it irritates me when anyone thinks the world revolves around tax deductions, but often this is the way clients think, and sometimes tax professionals can prey upon this. You can try to talk them out of something but some just seem to have a narrow mind. Very much like my client that has thousands of $$$ in interest and dividends, every year he is pissed off this time because he has to pay taxes on HIS money. He wants to pull it out of his accounts and put it under his mattress. And every year I try to explain the fact that even though you have to pay in so much in taxes, look at how much extra you keep by investing it and not putting it under your mattress. It just doesn't sink in for some people.

Now for this traveler, maybe he'll save all around if he does rent a car to go care for his rentals. Maybe he'll save more on gas even though he won't have the conveniences of his RV? Maybe that alone would make the difference between uprooting the RV or renting a car.

[Bees Knees]

I agree I'm being a bit harsh. When clients say dumb stuff like complain about paying taxes on income, I tell them to give me their income and I'll pay the tax for them.

Somehow, I don't think the guy's reason for choosing life on the road in his RV was so that he could claim travel expenses on his tax return. And I doubt the only reason he wants to head out of Ohio to make that trip down south is to check up on his rental property.

[Art Knapp]

I disagree. His home is his RV. He lives in the RV 365 days a year, just not in the same location. I agree that id he travels in his RV it is not deductible. However, if he leaves his home behind (his RV) his travel form there by other method, (air, rail, car) should be deductible.

I can't find any regulations or case law one way or the other, but it seems to make sense.

Does anyone have any code, regulation or case law that can be cited one way or the other?

[Bees Knees]

Your tax home is where you earn your living, not where you live. His RV is not his tax home unless he parks it next to his apartment building where he earns his living. The only travel expenses he could justify are those between one apartment building and a second apartment building, assuming he parks his RV next to one and establishes that location as his tax home.

[Art Knapp]

Bees,

Maybe I did a poor job of stating my original question. This is not a factual situation. There is no such actual taxpayer. I was really asking a what if question. My answer would have been no deduction in case 1 (travel by RV) and a deduction in case 2 (leave the RV behind). I should have done a better job of stating the purpose of the post.

However, it has already been determined (and agreed to by the IRS) that travel away from home to a rental property for business purposes is tax deductible. I stated in my original post that the travel was for business purposes. This is not in question. The question is whether or not the travel is "away from home".

I don't need a lecture on why a person that you have never met has decided to live in an RV. That is his/her choice and it has nothing to do with taxes. Even if it did, so what?

Do you tell your clients with rental properties not to deduct their legitimate travel expenses?

Do you tell your physicians, dentist and chiropractor clients not to deduct travel to educational seminars because they are just going for the deduction?

The last time I checked we worked for our clients, not the IRS. I will continue to do everything that I can to properly prepare tax returns and minimize my clients tax.

This thread has gone way off point. If no one has a factual answer to my original question, fine.

[oceanlovin'ea]

Rental property

You are talking about rental property, right? He is not self employed or even working apparently. So the information about tax home wouldn't apply in this situation, would it?

I don't have an answer about what is deductible but just thought the points about tax home for transient workers was not applicable here.

Linda F

[joanmcq]

He doesn't have a tax home, so he cannot be away from it. He is an itinerant. It doesn't matter if he leaves his RV for awhile, because his RV is not his tax home; he doesn't have one.

Bees is right in that, IF he parked the RV somewhere permanent, then he would have a tax home to be away from, and would be duplicating expenses IF he traveled to check up on his rentals and IF checking on the rentals was the PRIMARY reason for the travel. This is the same kinda question as the truckers that have no home but their truck...they are never away from home. But this guy doesn't even have a place where he earns his living...and if you say he earns the living from the rentals, well, then, he still doesn't have a tax home.

[Davc]

Bees is right in that, IF he parked the RV somewhere permanent, then he would have a tax home to be away from, and would be duplicating expenses IF he traveled to check up on his rentals and IF checking on the rentals was the PRIMARY reason for the travel.

No as Bees actually said, he would need to park the RV by one of the rentals. It must be parked near sourced income to establish a tax home.