Tax Minute

UNBELIEVABLE ALLOWABLE DEDUCTIONS (2)

Yesterday, I started to tell you about some allowable tax breaks that just don't seem right. How about the cost of a private airplane, are you allowed to deduct that? Of course not, right? Well, in some cases the answer is yes. Instead of having to take a day long drive or rely on the schedule of commercial airlines, a couple who owned a rental condo purchased a private airplane to check on their rental property. The IRS initially disallowed the deduction, however, in a tax court decision, the court ruled that they could deduct the cost of the condo related trips on the aircraft, including the fuel and the depreciation for the business use portion of the airplane. The deductions were allowed even though the airplane costs greatly increased their rental loss.

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